THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, September 12, 1996 TAG: 9609120329
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: 59 lines
John T. Hewitt, who founded Jackson Hewitt Inc. and built it into the nation's second-largest tax service, has resigned from full-time employment to pursue other business interests, the company said Wednesday.
The 47-year-old Hewitt will remain as chairman of Jackson Hewitt's board, but will phase out his day-to-day involvement with the company, which has been rocked the past few years by financial difficulties and senior management turnover.
Hewitt signaled last December that he was backing out of day-to-day operations of the company, which has more than 1,300 offices. At that time the Virginia Beach-based tax service began a search for a new chief executive to oversee daily activities. It hired Farm Fresh Inc.'s former vice chairman, Keith E. Alessi, in June.
At the time of Alessi's hiring, however, the tax service gave no indication that Hewitt would resign from full-time employment. Previously, Hewitt had indicated he would remain to help plan strategy and deal with franchisees.
``John's a very creative guy and just wants to try his hand at some other things,'' Alessi said.
Martha O'Gorman, Jackson Hewitt's communications director, said Hewitt is considering several potential business ventures, which she declined to name.
``He's got a lot of irons in the fire,'' she said, ``and he doesn't want to play his hand.''
Hewitt couldn't be reached Wednesday for comment.
Hewitt founded what became Jackson Hewitt in 1982 when he led a group of a dozen investors who purchased the six offices of a stumbling tax service in Hampton Roads called Mel Jackson's.
He dodged near-disaster once in the late 1980s when Jackson Hewitt signed a deal to operate tax offices in 169 Montgomery Ward stores across the country, but then found it lacked the cash flow and management to sustain the far-flung operation. To stave off bankruptcy, Jackson Hewitt shuttered 67 money-losing offices.
But from that low point, the tax service quickly rebounded and expanded into a near-nationwide outfit, stealing market share from industry leader H&R Block.
Jackson Hewitt's fortunes soured again, however, last year after some major changes in Internal Revenue Service procedures drastically cut the number of people filing for so-called refund-anticipation loans. Those loans are highly lucrative for tax services.
Squeezed for cash, Jackson Hewitt defaulted on some of its debts with its chief lender, NationsBank. That led to a top-to-bottom shakeup of the company that eventually led to Hewitt's decision to relinquish day-to-day oversight, as well as the departure of some other executives and managers.
Jackson Hewitt has shown signs of righting itself this year. It worked out more favorable lending terms with NationsBank and reported a net profit of $2.4 million for the 12 months through April, or three times the $840,000 earned in fiscal 1995.
Jackson Hewitt's stock closed Wednesday at $4.25 a share, up 25 cents, in Nasdaq trading. ILLUSTRATION: Color photo
John T. Hewitt will remain as chairman of the board by CNB