Rising interest rates will cost Carter Hawley Hale Stores, owner of the Broadway and four other department store chains, at least $29 million in additional charges during the next four years as the retailer pays off debt connected with its $1.1-billion restructuring, the company said Monday.
A higher than anticipated rate of 10.69% on $340 million in loans backed by real estate--up from the 10% contained in the Los Angeles company's July 28 proxy--will mean an additional $5 million in payments for the year ending July 30, 1988, and an additional $8 million in each of the next three fiscal years. As a result, payments are now expected to total $140 million this year and $139 million, $136 million and $129 million in the next three years.
Robert F. Buchanan, an analyst with L. F. Rothschild, Unterberg, Towbin in New York, said the firm will have no trouble meeting the higher payments but that, in general, its earnings assumptions are too optimistic. While Carter Hawley projects per-share earnings for the current fiscal year of $1.26 and for next year of $2.31, Buchanan has estimated $1 and $1.40.
With the increased interest payments, he said, "if anything, I would have to ratchet my numbers down."