Carter Hawley Hale Stores said Tuesday that it will spend about $650 million over the next five years on a capital expenditure program that will involve the opening next year of 37 new stores and a major modernization of existing stores.
Chairman and Chief Executive Philip M. Hawley told shareholders at the company's annual meeting that the Los Angeles-based retailer will open 30 new Contempo Casual stores in 12 states and seven department and specialty stores.
He said later at a news conference at the Hyatt Regency Hotel that the Broadway will move into the Denver market for the first time with two new stores and will open one at Horton Plaza in San Diego. Neiman-Marcus will open one store in Palo Alto; Holt Renfrew, one in Pointe Claire in Montreal, and Thalhimers, two, in Charleston, S.C., and Roanoke, Va.
Hawley told shareholders that Carter Hawley "is getting important pay-out from the restructuring which was put in place over the last several years." He noted that first-quarter results hit records, with sales up 14% from the previous year's period to $851 million and earnings from continuing operations rising 58% to $11.6 million. Net earnings, which also totaled $11.6 million, were up 35% from the year before, when results included operations that have since been discontinued.
He added, however, that sales in May for Carter Hawley and the retail industry in general were "sluggish." He said that the company foresees "a generally slow second quarter, with some improvement in sales probable in the third and fourth quarters." The second quarter traditionally is the smallest contributor to Carter Hawley's annual earnings.
"In any event," he told shareholders, "1985 should be an excellent year of profit for Carter Hawley Hale." He added: "Since the start of the present recovery in mid-1982, our company's stock has increased in value by 159% while the (Standard & Poor's 500-stock index) average has grown by 76%."
In other Carter Hawley developments:
- Gregory C. Crews, 35, was promoted to president and chief executive from senior vice president of the company's New York-based market services division. The division, which develops products exclusively for chains owned by Carter Hawley, will account for $600 million to $700 million worth of product, or 15% of Carter Hawley's estimated $4 billion in total 1985 sales. The division, which will expand this year to 200 employees from 134, will generate $1 billion in merchandise within the next few years, Hawley said.
- Last February, Carter Hawley launched a new management-education center in Anaheim for its executives. "To the best of our knowledge, this education center represents a first of its kind in retailing today," Hawley said.
- The company said it has instituted an expanded commission program and other incentives for sales employees to improve service.
- Hawley said the Limited, which waged an unsuccessful battle to take over Carter Hawley last year, has quietly sold 85% of its Carter Hawley shares since January. The Limited, officials of which could not be reached for comment, owned 718,000 shares last July.
- Carter Hawley shareholders approved various routine items, including the reelection of the company's 22 directors.