
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, March 13, 1992                   TAG: 9203130153
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: Landmark News Service
DATELINE:                                 LENGTH: Medium

HOFHEIMER'S LARGE DEBT CLOUDS FUTURE

Hofheimer's Inc., the regional shoe chain, said it expects its remaining stores to continue operating as usual. But the financial picture emerging in bankruptcy court raises questions about the company's viability, an analyst said

Aubrey L. Layne Jr., Hofheimer's new president, said Thursday he expects "business as usual" for the stores that remain open.

In Roanoke, that's three of four stores. The Hofheimer's Stride-Rite Bootery at Tanglewood Mall in Roanoke County was closed as the company scaled back its operation.

The Stride-Rite Bootery at Valley View Mall will remain open along will Hofheimer's shoe stores at both Valley View and Tanglewood, Layne said.

The Norfolk-based company on Monday filed for protection from its creditors under Chapter 11 of federal bankruptcy law. It listed assets at $8.8 million and liabilities of $30 million.

Kenneth M. Gassman Jr., retail analyst for Davenport & Co. of Virginia, said that large gap bodes ill for the shoe chain.

"Barring any one-time write-off, this balance sheet is far worse than many of the major retailers, like Federated Department Stores and Macy's, who have filed [recently] for bankruptcy," Gassman said.

"Based on the information, it would appear to be very difficult for the company to show a recovery from this."

Layne said the company intends to move ahead by bringing new stock into its stores.

NationsBank, as Hofheimer's largest single creditor, could hold the key to the company's survival, said Carl Marshall, of SDN Market Research, a retail analysis firm in Hampton.

Bankruptcy papers show NationsBank, the only secured creditor listed, is owed $23.3 million; $1 million of the debt is unsecured. NationsBank foreclosed on the company's headquarters in Norfolk last week.

Hofheimer's, a Hampton Roads shoe retailer since 1885, listed 791 creditors. The remaining $6.7 million is owed to unsecured creditors, including vendors of merchandise and employees, and for taxes owed local governments.

Court records also show that from 1990 to 1991, income for Hofheimer's Inc. fell about $7.4 million, yet Anthony V. Beechey, former president and chief executive officer, was paid an annual salary of $680,817, not including stock options and other company perks.

Beechey, who led the company through a $29 million leveraged buyout in 1988, resigned Feb. 3.

Business writer Sandra Brown Kelly contributed to this story.

by CNB