Martin Lawrence Chairman to Leave Art Retailing Firm

Martin Lawrence Limited Editions Inc.’s Chairman and Chief Executive Martin Blinder is leaving, as the long-troubled Van Nuys art retailer and wholesaler looks to an improving economy for a return to financial health.

Chief Financial Officer Allen A. Baron will succeed Blinder as chairman, but the 15-year company veteran will not add the chief executive title. Blinder, 47, a company co-founder, will remain on Martin Lawrence’s board and act as a consultant for one year. President Barry Levine will also take on some of Blinder’s duties.

Blinder wasn’t available for comment, but Baron insisted the company founder wasn’t pressured into resigning. “He left of his own free will because he’s relocating his family out of state,” Baron said. Blinder’s resignation is effective Sept. 15.

The management change occurs after the collapse of a tentative deal that would have given Martin Lawrence $3.5 million in cash through a private debt and equity financing from the Herrick Co. of Boca Raton, Fla.

The agreement would also have given privately held Herrick, which specializes in real estate acquisitions, a chance to gain control of Martin Lawrence’s board. As part of that failed deal, Blinder had agreed to resign, although he would have remained as a consultant until new management was in place.

Although the company is seeking other sources of capital to fund operations, Baron contended there is sufficient cash flow. The economy is still weak, but Baron believes customers are starting to loosen their purse strings with signs of recovery arriving. Martin Lawrence has no long-term or bank debt.

“We are trying to work to profitability,” Baron said.

Baron said he plans to stick to the philosophy that has guided Martin Lawrence since it started in 1976--to bring affordable art to the nation through its galleries, located mostly in shopping malls. But he realizes that Americans may not be as free-spending in the 1990s as they were in the previous decade.

With that in mind, the company is exploring new distribution channels and will start selling art in the $500-and-less range--well below the typical $1,400 price tag of the limited edition lithographs and sculptures for which it is known. It is also searching for new artists. “There will be pent-up demand (as the economy improves),” Baron said.

Martin Lawrence has been particularly hard-hit by the recession. After years of solid results, the company began to lose money in 1991. To cut costs, it has shut down 25 stores and laid off about 100 workers over the past few years. It now has 21 stores.

In 1993, Martin Lawrence lost $6.69 million on a 22% decline in revenue to $18.7 million. In the second quarter ended June 30, the company cut its losses to $1.73 million, from a loss of $2.26 million a year before, while revenue remained flat at about $3.8 million. It narrowed its losses in the recent quarter principally by renegotiating leases on its mall galleries.

It also felt the effects of the Jan. 17 Northridge earthquake. Corporate headquarters were shut down for two weeks, its gallery at Sherman Oaks Fashion Center was shuttered for more than three months, and its Northridge Fashion Square location remains closed.

In 1991, when the company was already struggling with the recession and the faltering art market, Martin Lawrence became embroiled in a legal fight with one of its biggest sources of revenue, artist Hiromichi Yamagata. The two parties settled their differences without money changing hands. But it resulted in Martin Lawrence’s losing the services of the artist who had previously accounted for up to 42% of its sales.