SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 23, 1995
HECHINGER COMPANY
(Exact name of registrant as specified in its charter)
Delaware 0-7214 52-1001530
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
3500 Pennsy Drive Landover, MD 20785
(Address of principal executive offices) (Zip Code)
(301) 341-1000
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On August 23, 1995, Hechinger Company (the "Company") issued
a press release announcing its plans to combine its Hechinger Stores
and Home Quarters Warehouse operations under one management team. The
press release is attached as Exhibit 99 hereto and is incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(C) Exhibits.
Exhibit No.
99 Press release dated August 23, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Hechinger Company
By: /s/ W. Clark McClelland
_________________________
W. Clark McClelland
Executive Vice President and
Chief Financial Officer
Date: August 23, 1995
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
99 Press release dated August 23, 1995
FOR IMMEDIATE RELEASE
HECHINGER COMPANY ANNOUNCES PLAN TO COMBINE ITS HECHINGER STORES AND
HOME QUARTERS WAREHOUSE OPERATIONS
LANDOVER, MARYLAND -- August 23, 1995 -- Hechinger Company (Nasdaq-
NNM: HECHA and HECHB) today announced plans to combine its Hechinger
Stores and Home Quarters Warehouse operations under one management
team.
John W. Hechinger, Jr., Chief Executive Officer of Hechinger Company
said, "Home Quarters and Hechinger have become similar in many ways.
In the HQ Chesapeake Class store and the Hechinger Home Project
Center, we have developed innovative store formats that serve a
similar customer, emphasize customer service and differentiate us
from competitors. In addition, HQ and Hechinger have the same
business objective to be the leading home improvement retailer in the
markets they serve. And, HQ and Hechinger are competing with the same
industry players.
"Because of these similarities, we saw the opportunity to create a
single, fully integrated Company. This new, unified Company will
combine the talents of the strong HQ and Hechinger management teams.
We believe the increased size and leverage from operating as a single
business will create a more powerful organization. We will employ the
best practices of both organizations. We will have more leverage with
our vendors. By combining the best of our HQ Chesapeake Class stores
and the best of our Hechinger Home Project Centers, we will create
what we believe to be the best stores in the home center industry.
"In addition to these benefits, we will become a more efficient
company by eliminating overlapping functions. We believe that this
will save us approximately $20 million (pre-tax) annually once the
merger has been completed, which is expected by late 1996. We believe
this is the right decision for the business and for our shareholders."
As a result of this action, John W. Hechinger, Jr., President and
Chief Executive Officer of Hechinger Company will become Chairman of
the Board of Directors and will continue as Chief Executive Officer of
Hechinger Company. Kenneth J. Cort, currently President and Chief
Executive Officer of Hechinger Stores Company, will become President
and Chief Operating Officer of the consolidated company. W. Clark
McClelland will continue in his role as Executive Vice President and
Chief Financial Officer of Hechinger Company. Frank C. Doczi,
currently President and Chief Executive Officer of Home Quarters
Warehouse, Inc., will assume the position of Special Advisor to the
Chairman. John W. Hechinger, Sr., currently Chairman of the Board of
Directors, will become Chairman of the Executive Committee of the
Board of Directors.
Mr. Hechinger, Jr. said, "Frank Doczi has been an inspirational
leader for Home Quarters, Hechinger Company and the home center
industry. He has done a tremendous job building Home Quarters to a
$1.3 billion company from its inception in just 10 years. Everyone
at Home Quarters and Hechinger owes Frank a debt of gratitude. I
look forward to his continued support and guidance."
Mr. Doczi said, "I am very proud of what the Home Quarters team has
accomplished in a very short time. I know all of the Home Quarters
people will continue to do their best in the merged organization.
I will continue to support the Company and assist John in every way
possible."
--more--
Mr. Hechinger, Jr. continued, "Since joining Hechinger in January
1993, Ken Cort has proven to be a very strong merchant. He is
directly responsible for the latest version of the Hechinger Home
Project Center, which has received industry and customer acclaim
for its merchandising and customer service features. Under Ken's
leadership, Hechinger Stores has maintained its position as a
leader in its markets in the face of heavy competitive incursions.
I am confident that Ken will do a great job in his new role."
The new management team of the combined company will be made up of
a combination of current Home Quarters and Hechinger employees.
Most of the management and administrative functions will be
consolidated into Hechinger's existing facilities in Landover,
Maryland. Certain information systems and accounting functions are
planned to remain in the Virginia Beach, Virginia area where the
offices of Home Quarters currently reside.
Mr. Hechinger, Jr. continued, "As always, we are very concerned
about the welfare of our employees affected by these actions. We
will do everything we can to lessen the problems they may face and
show them the compassion they deserve." The Company will offer
severance pay and outplacement assistance to employees affected by
these actions.
As a result of these actions, the Company expects to record a
charge of approximately $20 to $25 million (pre-tax) in the fourth
quarter of fiscal 1995. The charge will cover the costs of
severance, the write-off of certain assets, and other related
costs.
Because of the Company's commitment to complete this consolidation
successfully and in a timely manner, the Company plans to limit new
store openings in 1996 to one new Home Quarters Warehouse
Chesapeake Class store and relocate two older, smaller Hechinger
stores to new 95,000 square foot facilities. In 1997, the Company
plans to open approximately five new Home Quarters Warehouse stores
and relocate two Hechinger stores to larger facilities.
Hechinger Company, a leading specialty retailer, serves the growing
home improvement industry with 64 Hechinger stores and 51 Home
Quarters Warehouse stores in 21 states and the District of
Columbia.
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Contact: Richard S. Gross
Vice President, Corporate Controller
(301) 341-0443
