THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Tuesday, November 15, 1994 TAG: 9411150299
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Medium: 67 lines
The Hofheimer's shoe chain has swapped hands three times and has plunged into bankruptcy once since the family first sold it in 1982.
This time, the ailing chain will go to a private German company called Gabor Shoe Co., the largest manufacturer of women's dress shoes in Europe.
``We had several alternatives,'' said Aubrey Layne, president and chief operating officer of Hofheimer's. ``We felt this is the best one. They aren't closing stores. They aren't changing the Hofheimer's tradition.''
Layne, who has been with the company for about 10 years, will leave after several months.
Hofheimer's is being sold by Shore Enterprises Inc., headed by Duncan McDuff. Shore Enterprises, which operates a chain of convenience stores on the EasternShore, purchased the Chesapeake-based shoe chain in bankruptcy court in 1992.
The agreement between Gabor and Shore Enterprises was signed last week for an undisclosed price. It will keep cash-strapped Hofheimer's Inc. from folding after more than a century in Hampton Roads.
The 69-store chain emerged from bankruptcy two years ago, but stumbled recently when shoe sales nationwide went flat. Several months ago, some shoe companies refused to ship merchandise until late payments arrived, Layne said. Hofheimer's also began making cutbacks in employee hours.
``Probably the best option they had was to be sold to an overseas company,'' said Kenneth M. Gassman Jr., a retail analyst with the Richmond brokerage Davenport & Co. ``They probably have the financial strength to support Hofheimer's as it continues to reposition itself in the market.''
The new owner, Gabor, has promised to keep the Hofheimer's name but will move the headquarters and warehouse from Chesapeake to Glastonbury, Conn. About 40 employees will be affected, but some have been offered new jobs. Gabor does not plan to close any Hofheimer's stores.
Hofheimer's will be operated through Prague's Shoes Inc., a Gabor subsidiary based in Glastonbury. Louis E. Schwartz, president and chief executive of Prague's, will take on the same titles at Hofheimer's.
Schwartz said he proposed the purchase to owner Joachim Gabor, who approved and signed the papers last Thursday.
The buyout is expected to be completed by year's end, but customers probably won't see major changes until next spring, Schwartz said. Among the changes will be more selection, including the Gabor brand.
``The difficulty Hofheimer's has suffered, I think, is not having merchandise and not having a merchant on board,'' he said. ``The biggest change you'll notice is a consistent flow of merchandise. We'll be able to give a look that's not there now.''
Schwartz also may expand Hofheimer's into new markets and create more of a presence in North Carolina.
Gabor Shoe Co., based in Rosenheim, Germany, is owned by Joachim Gabor. The 50-year-old company, which has more than 3,000 workers, has plants in Germany and Portugal, tanning facilities in Italy and India, and sales offices in Germany, Switzerland and Great Britain. In 1980, Gabor purchased Prague's Shoes, which now has 33 stores in Connecticut, Massachusetts and New York.
There are no promises that Hofheimer's won't change hands - again - several years from now. But Schwartz says that Gabor's track record indicates otherwise.
``I must remind you that we only do one thing: the shoe business,'' he said. ``Gabor owns many things, but only in the shoe business. We don't get into anything we don't know about.'' by CNB