Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 7, 1994 TAG: 9401070081
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: By DAVID M. POOLE and SANDRA BROWN KELLY STAFF WRITERS
DATELINE: LENGTH: Medium
Hanover Direct Inc. plans a 500,000-square-foot facility on Old Hollins Road that will employ the equivalent of more than 200 full-time workers by 1995. Roanoke County put together a $2 million package of incentives to persuade the catalog retailer to build the center.
Hanover Direct executives were not available to comment on wage scales. Similar warehouse jobs in the Roanoke Valley typically pay between $6 and $7 an hour.
"They are not minimum-wage jobs," Roanoke County Supervisor Bob Johnson said.
Roanoke County officials say Hanover Direct will mean more than the jobs it will bring to the Roanoke Valley.
The company, which markets merchandise through 15 catalogs, should mean business for area trucking and shipping companies. There also is the possibility that Hanover Direct, which acquired the Tweeds catalog operation in September, could expand the Tweeds distribution center in Bonsack.
"It's a late Christmas," exclaimed Roanoke County Supervisor Fuzzy Minnix.
Roanoke County pieced together the incentive package from existing county and state programs. County Administrator Elmer Hodge said the county and state would recoup the money from the Hanover Direct facility within three years.
"This is one of the best paybacks we've had in recent years," Hodge said.
The incentive package will include:
State highway funds to widen a mile-long section of Old Hollins Road: $900,000
State employee training funds: $300,000
Governor's Opportunity Funds for site improvements: $350,000.
County funds for land and utilities: $455,000.
Details of the incentive package will be unveiled this morning at a news conference sponsored by the Roanoke Valley Economic Development Partnership, which helped recruit Hanover Direct.
Thursday, Hanover Direct President Jack Rosenfeld explained the reason behind the move in a letter to employees at the company's main shipping center in Hanover, Pa.
Rosenfeld said the company could no longer afford to fill orders out of five different warehouses in the Hanover area.
"This has not only increased our costs, but has resulted in split shipments and other inefficiencies," he said.
The company will consolidate into one warehouse in the Hanover area and move the balance of its distribution operation to Roanoke County. The move will be complete in early 1995, he said.
Rosenfeld said the company would "do everything we can" to keep job losses in Pennsylvania to a minimum.
The company's nonunion work force in the Hanover area is about 1,100, according to Sandra Butt, president of the Hanover Area Chamber of Commerce.
Hanover Direct has grown at a tremendous rate in the last decade through a series of mergers and acquisitions.
It began in the 1950s with a single catalog, Hanover House. The company eventually was acquired by the Horn & Hardart Co., a New Jersey-based conglomerate best known for its Automat cafeterias in New York.
By 1991, Horn & Hardart had run up a mountain of debt from poor investments in restaurant and casino ventures.
In 1991, North American Resources Ltd., a private investment firm, invested $40 million in Horn & Hardart in exchange for controlling interest in the company.
North American Resources is a joint venture between the Quasha family and Cie. Financiere Richemont AG of Aug, Switzerland. Quasha, a 43-year-old lawyer from New York, is chairman of the board of Hanover Direct.
Since 1991, Horn & Hardart has spun off its non-catalog-related ventures and reorganized under the name Hanover Direct.
Last fall, Hanover Direct acquired Tweeds, an upscale fashion catalog with a 175,000-square-foot distribution center on the Roanoke-Botetourt county line.
The Tweeds facility employs about 200 people, according to the Roanoke County Economic Development Office.
by CNB