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Walker-Scott to Be Acquired by L.A. Company

March 30, 1985|BILL RITTER | San Diego County Business Editor

SAN DIEGO — Walker-Scott Corp. said Friday that it has signed a letter of intent to be acquired by Los Angeles-based Desmond's & Associates for $12 per share, or about 74% of Walker-Scott's per-share book value.

If the deal is completed, the 50-year-old Walker-Scott, a publicly traded company, will become a wholly owned and private subsidiary of Desmond's & Associates. Desmond's Inc. is a principal shareholder of Desmond's & Associates and operates a chain of well-known retail clothing stores.

"I think the place can use some fresh thinking," said Robert J. Dicker, president and chief executive of the retail department store chain, which markets to a middle-income clientele. He has been at Walker-Scott's helm since 1975.

Dicker said that Desmond's has a "strong financial base" and that the deal is "good for the company and shareholders."

The acquisition hinges on the signing of a definitive merger agreement between the two companies and is subject to approval of Walker-Scott stockholders, who will vote on the proposal in July.

Walker-Scott has changed dramatically in the past year, eliminating major-appliance departments and de-emphasizing hardline areas such as housewares and small appliances. In January, the firm closed its downtown and La Jolla stores, leaving it with 12 outlets.

The $12-per-share price could be reduced, depending on Walker-Scott's results for the first quarter ending April 30.

Dicker and Boyd E. Alvord, Walker-Scott executive vice president and chief financial officer, own a total of more than 42% of the company's 414,125 common shares outstanding. After the merger, Desmond's President Harold Kapelovitz will become chief executive of Walker-Scott. Dicker and Alvord will serve as consultants "to smooth the transition."

During Dicker's 10-year tenure, Walker-Scott's financial performance peaked in 1979, with net earnings of nearly $1.4 million on sales of $43.3 million. For the nine months ended Oct. 27, 1984, Walker-Scott reported a loss of $519,974 on sales of $28.7 million, compared to a loss of $306,105 on sales of $29.3 million the year prior.

The stock closed Friday in over-the-counter trading at $7.50 bid, up 25 cents.

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