How business, doctors and journalists prey on your food anxieties I

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Woolworth Corp . lished during his vears at Federated <strong>and</strong> elsewhere . Ralph Lauren offered him the m:mber m-o j ob at h is compam, <strong>and</strong>, according to headhunter Herbert il4ines, Farah had other offers, too . But they ~ceren't Mhat lie wanted . Says Mines : "He had already been burned by corporate politics-at Macv <strong>and</strong> Federated-<strong>and</strong> wanted to run his own show ." Woohaorth Corp ., the badlv tattcrcd 58-billion-a-vear retailer, offered %rhat he %cas looking for . In ntici- December L•e became Woohanrth's chairman <strong>and</strong> chief executne . As an incentiNe he ~%as granted options on 800,000 Woolworth shares at 513 .63-recent price S15 .38-<strong>and</strong> 200,000 shares in restricted stock . Woolworth was a mess, <strong>and</strong> Farah kne«it . Its sales <strong>and</strong> earnings had dropped since the earlv 1990s . Bv last year net earnings had almost vanished, the net profit margin was under a pennv on the sales doilar <strong>and</strong> its chief esecutice, lVilliam Lavin, had been forced out . By the beginning of dtis year the company was almost out of cash <strong>and</strong> its short-tern debt had ssvel!ed from just 516q million in 1992 to S853 million in 1994 . "Profits had dwindled so much, it became impossible to pavdown that debt after the Christmas selling season," esplains Manin Behm ofDuff& Phelps Credit Rating Co . - Farah was looking for a challenge, but lie ma% ha~ e gotten more tlrut he bargained for . ~Voohvorth was facing A new Foct Locker in Manbattan Woolworth needs cash to update the rest of the chain . its annual bank re~ie« in the early summer, <strong>and</strong> Farah was concerned that the company might violate its loan co%enants-he needed some breathing room-so off he Nrent to meet with his bankers . With a respected merchant no\k running the company, the banks agreed to extend a S 1 .5 billion reNolcing credit line-S1 billion for three ve ;trs Atd S500 million for one year . Farah then raised S200 million by issuing long-term debt, <strong>and</strong> has another S430 million on the shc!f that he can issue if need be . To get Woohvorth solcent . Farah knocked out the sacred dividend-it had had an unbroken record of 83 eears-slaslted capit.tl spending, `Basically Woolworth is a kennel club . Most of them are dogs ." wrote down inrentorv <strong>and</strong> began looking for asser; to sell . In short, he was functioning as a financier more than 3 merch<strong>and</strong>iser . But Woolworth's problems aren't purehfinancial . Thetare fundamental . 1W'oohwrth is not so much a retailing companr as a holding company for assorted retail chains . One of those is the Athletic Foonrear & Apparel di%ision led bv flagship Foot Locker, a 1,828-shop chain, long R'oohworth's star . That . svith the rest of the footwear division, accounts for some 70%of the companc's operating protits . But the market for athletic shoes has sloued to a 2%-a-%,ear growth rate from the 18% it enjored in the late 1980s, <strong>and</strong> Foot Locker's inventory control svstem is lacking sophistication, its stores in serious need of modernizing . Other Woolworth chains include the San Francisco Music Box Co ., a musical gift company, the Best of Times, a watch retailer, <strong>and</strong> Karuba, selling women's casual apparel . Farah «ould probabhlike to sell some of these, but that won't be easy . Many of these chains are failing ; some that might be able to succeed need extensive remodeling <strong>and</strong> a promotion budget . Few, if any, will comm<strong>and</strong> decent prices . Since they're ntallbased with short iive-y°ear leases, they don't even have leases to sell . Savs Alan \-[illstein, editor <strong>and</strong> pub!isherof Fashion Network Repor., `Basicallv, Woohrorth is a kennel club . Iv[ost of them are dogs ." Farah has unloaded a few of the dogs . [n the first quarter, ended Apr . 29, Farah sold r ..Y Place, a chain of pharmacies, for 537 million in cash, notes <strong>and</strong> the assumption of liabilities . He also found a buver for Kids Mart/Little Folks, 331 children's clothing stores, for $ 15 million . Miat about the old varienr stores themselves? Their Euture is dim . Thev have been pared down from about 950 to 428 . Afost ofthose left do ha~e valuable 20-% zar leases, but if riiev are to be sold, thcv must be sold one bv one . It is unlikelv that anv buver %%ants the whole group . Woohworth lost money in the first quarter, $80 million on 51 .8 billion in sales, <strong>and</strong> a return to past levels of profitability is still some way ol'r . Which means that Farah will haNe to continue keeping the financial wolves at bay for a witile longer . Rogcr Farah declined to be interviewed for this ston~, Who can blame him? With all the fires lie has to put out, lie probably has not yet had time to formulate merch<strong>and</strong>ising plans for his mishmash of <strong>business</strong>es, let alone draw up a clear strategy for a mrnuround. ~ =s Fnrbes . August 14 .. 1995 20466i3305 http://legacy.library.ucsf.edu/tid/agf97d00/pdf
Remember your first time driving all by yourself? This is better. INTRODUCINC THE 1995 JJAGUAR .YJS. W Y9u PULLFD OUT of the drieeway, gave mom <strong>and</strong> dad a wave, <strong>and</strong> experienced an excitement~<strong>and</strong> freedom you'd never known before . The 1995 Jaguar XJS 4 .01, Convertible has the performance <strong>and</strong> stunning looks to get that feeling back-in a hurry . A potent new 23T HP AJ16 engine generates more horsepower than last year's model, <strong>and</strong> integrates a new state-of- the-art engine management system . Of course, every XJS features such amenities as Connollv leather, walnut fascia <strong>and</strong> trim, <strong>and</strong> is backed by a four-year/50,000 mile warranty :" The 1995 XJS 4 .OL Convertible . After all, why should teenagers have all information <strong>and</strong> your nearest dealer, call1-800-4-JdGG .-tR . the fun? For more ~ C C5 ;L\ ~ ~ J f11G UAR ~ G~5 .W http://legacy.library.ucsf.edu/tid/agf97d00/pdf
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Page 13 and 14: `Surprise me . Give me more power t
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Page 19 and 20: The disaster cane as no ereat surpr
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Page 27 and 28: Other Comments Waffling Away the Ti
Page 29 and 30: There's a lot than you pro VISION.
Page 31 and 32: Commentary on events at home <stron
Page 33 and 34: One of the largest teams at the Oly
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Page 49 and 50: I Toshiba Multimedia /100, 0 sA1
Page 51 and 52: I ~ , I SOUNDS SO REAL, PEOPLE WILL
Page 53 and 54: Using phony invoices, importers are
Page 55 and 56: ADVERTISEMENT 2 THE SKYTEL U .S . C
Page 57 and 58: ADVERTISEMENT 4 The Golf Club of Ge
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Page 61 and 62: Riviera Country Club, Pacijc Palisa
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Page 65 and 66: ADb'ER'TISESiEVf 12 T H E S O U T H
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Page 69 and 70: Wvnstone Golf Club, North Barringto
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Page 89 and 90: i i i Patel, Inc. Patel), whose com
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Page 93 and 94: OUR FINANCIAL SIDLLS HELPED ONE COL
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"With the Optra line, Lexmark has e
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A D V E R T I g E M E N T C DAEWOO
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The relationship between father <st
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Daewoo Sells Solutions 11 r(,o o& E
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Forbes Special Offer r Bill me . -1
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A D V E R T I S E M E N T KORE A N
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A DV c R T I S E M E N T 2 0 ASIANA
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World War II U,S . arfi`lery, 1938
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_ World War II Humiliafion Forthese
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Hcalth scare I Expect more such non
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TRW Today In 1994, 7RW's sales <str
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SPECIAL ADYERTiS1NG SUPPLEMENT a 0
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. SPECIAL ADVERTISING SUPPLEMENT P
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RECEIVE FREE INFORMATION FROM ADVER
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In the success of new electronic ga
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tl Fred Gibbons beat Bill Gates to
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