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Subject: Companies In The News
Date: Wed, 11 Nov 92 12:52:31 EST
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11/11/92


TITLE Companies In The News #m#gm#m##m#Photo Don Clarke#m#Caldor
Adding Soft Goods To Go Upscale As Chain Grows

John A. Jones A 40-year-old discount retailer in the New England
and mid-Atlantic regions, Caldor Corp. is speeding up its expan-
sion after adding a dozen stores in the past two years.  Caldor,
based in Norwalk, Conn., now has 129 stores in eight states. They
claim a leading market share in Connecticut, the New York City
metropolitan area and the Hudson River Valley region. They also
are well-established in Boston, Philadelphia and Baltimore.


Investor's Business Daily, Retail/Discount & Variety ranks 10th,
based on six-month stock-price performance with added weight
given to recent months. In this series, leading companies within
the group are reviewed.  Caldor was founded in 1951, sold to As-
sociated Dry Goods 30 years later and merged with May Department
Stores Co. in 1986. Management, headed by Chairman and Chief Exe-
cutive Don R. Clarke, took over in a leveraged buyout in 1989.
Clarke has headed Caldor since 1986.

Tightening Hold On Markets

Last May, he told shareholders that after opening 11 new stores
in the previous two years, Caldor is expanding faster to
strengthen its hold on its markets. The company plans to add 60
stores over the next five years, including five in a new market
in Rochester, N.Y.  Earlier this month, Caldor filed a bid with
the bankruptcy court in New York to buy six Alexanders Inc.
stores in the New York City metropolitan area.  Caldor plans to
open new stores in its present markets and to remodel about 20
existing stores a year until most of them have had a major facel-
ift by 1995.  The company also is building a new distribution
center in Newburgh, N.Y.  Robert S. Schauman, chief financial
officer, said Caldor will finance its expansion from internal
sources, including its strong cash flow. He said Caldor Don
Clarke

doesn't plan to reduce its debt, "but as we grow, we will not add
debt." As a result, he said, debt will account for a declining
percentage of total capital and interest expense will drop as a
percentage of sales.

Long-term debt at midyear was $306 million, or 64% of total capi-
tal.

Caldor is due to report its fiscal third-quarter earnings
today.#m#Nov. 11#m# Last week it reported sales for the quarter
ended Oct. 31 rose 13% to $473 million from $419 million a year
earlier. Comparable store sales rose 10.8%, including a gain of
17.7% for October.  Second-quarter earnings for the period ended
Aug. 1 jumped 94% to 33 cents a share from 17 cents a year ear-
lier. Net income was up 96% to $4.85 million from $2.48 million.
Sales rose 13% to $492 million from $436.9 million.

For the fiscal year ended Feb. 1, the company reported pro-forma
earnings of $21.7 million, or $1.48 a share (after adjustments
related to a debt refinancing in 1990 and the initial public
offering in 1991), up 22% from $17.7 million, or $1.22 a share,
the previous year. Sales rose 5.7% to $1.87 billion from $1.77
billion.  Clarke noted a drop of 0.7% in selling, general and ad-
ministrative expenses as a percentage of total sales in the la-
test quarter, and said inventories at midyear were on plan and
"properly positioned going into the fall season."

Comparable-store sales rose 5.5% for the first half after slip-
ping 0.4% last year in the slump that hung over the Northeastern
U.S.  Schauman said the sales gains reflect both an improving lo-
cal economy and Caldor's growing market share.  "We also feel
we're getting more of the mall business," he said, drawing custo-
mers who still want quality but look for lower prices.

Located In Built-Up Suburbs

Some of Caldor's stores are in malls, but Schauman said the com-
pany prefers locations in strip centers or stand-alone sites, in
well-populated urban and suburban areas. Last month, Caldor
opened its latest prototype store in Bristol, Pa., to show off a
new look in brighter and more colorful merchandise displays.
Seven more openings are set for November, including two in a new
market in Delaware.  The stores carry a variety of merchandise,
including housewares, electronics, furniture, seasonal items and
toys, with an increasing share of softline products such as ap-
parel, jewelry and cosmetics.  Caldor historically has focused on
hard goods. In 1987, only 27% of the merchandise was in soft
lines. This year, the share is up to 32%, with plans to increase
it to about 40% by the turn of the century.  Caldor opened
Nathan's Famous Restaurants in five stores this year, and plans
to add several more as it opens new stores and remodels existing
ones. Four pharmacies also were added this year, bringing the to-
tal count to 11.  Analysts said the changes will strengthen Cal-
dor for increasing competition from Wal-Mart Stores Inc., as that
chain advances into the Northeastern market.  Thursday: Dollar
General Corp.

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