THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, August 18, 1994 TAG: 9408180501
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 56 lines
Hills Stores Co., a discount retailer that emerged last October from bankruptcy, said Wednesday that it plans to open three stores in Hampton Roads and two in Richmond.
But those plans could be foiled.
The same day that Hills announced the openings - and stronger sales - Dickstein Partners Inc. filed papers to take control of the Canton, Mass.-based company. Dickstein owns 9.5 percent of Hills.
Hills responded with a shareholder rights plan, or ``poison pill,'' designed to make it too expensive for anyone to take over the company without negotiating with its board.
As part of its expansion plans, the retailer has committed to leasing three stores in Hampton Roads and is interested in opening several others in the region, said William K. Friend, a Hills spokesman.
Hills officials, citing ongoing leasing negotiations, would not say where any of the Hampton Roads stores would be located. The three stores will open early next year, and the Richmond stores will open this fall.
Hills has 152 stores in 11 states in the Midwest and mid-Atlantic.
What happens to those plans could hinge on who winds up controlling the company.
Hills will fight for its sovereignty by protecting its shareholders from ``coercive takeover tactics,'' said Michael Bozic, president and chief executive officer. ``Neither Dickstein nor any other person should be permitted to accumulate shares without paying a control premium.''
In its proxy statement to the Securities and Exchange Commission, New York-based Dickstein praised management for its work since the chain reorganized its debts under Chapter 11 bankruptcy. But it said the board ``has failed to translate this operating performance into profits for stockholders in the market.''
Also on Wednesday, Hills reported it lost $3.6 million for the quarter that ended July 30. In the comparable period of 1993, when the company was still operating under bankruptcy court protection, it lost $4.3 million.
Revenue rose about 5 percent to $375.6 million for the second quarter, up from $357.3 million. Comparable-store sales also increased, by 5.5 percent. Comparable stores are those that have been open at least a year. Cash flow jumped 8.4 percent, to $14.2 million in the quarter from $13.1 million in the comparable period of 1993.
``We're pleased that our strategy of cost containment and concentrating on store remodeling is paying off,'' Bozic said. ``We are forging ahead with our expansion plans.'' MEMO: Bloomberg Business News contributed to this story.Bloomberg Business
News contributed to this report.
by CNB