Advertisement - Click to support our sponsors.
Crazy Shirts Crazy Shirts has appointed a new board and is seeking millions of dollars to rebuild the troubled company, a spokesman said today.
shuffles its board
The addition of five new members
comes amid financial problems
for the Hawaii companyBy Tim Ruel
Star-BulletinThe Aiea-based clothing manufacturer and retailer is undergoing several major changes, following an economic slump in Hawaii and Asia, increasing retail competition on the mainland and a failed land development in Aiea.
"We're kind of cash poor," said Chris Kinard, human resources director. "We need cash."
Though Kinard could not say exactly how much money the company needs, he noted that Crazy Shirts has not produced a profit since 1997.
The company has made attempts to turn around since then, but those plans ran into a disagreement over strategy between five of its previous board members and company Chairman Rick Ralston and Chief Executive William Almon, Kinard said.
"Basically, it was a difference of opinion," Kinard said.
Those five board members -- two from the mainland, three from Hawaii -- had served for 18 months and resigned earlier this month because of the disagreement. Kinard would not elaborate on the differences.
The five new board members are:
The new group has much to do.John Loevenguth, chief operating officer and chief financial officer of Crazy Shirts;
Crazy Shirts, founded by Ralston in 1962 in Waikiki, expanded to California in the late 1970s and had opened a total of 33 stores on the mainland by 1997. The company also relocated headquarters and manufacturing to Orange County that year.
Then problems began. Asia and Hawaii's economic slumps kicked in, and half the new mainland stores were not selling, especially those opened at ski lodges, Kinard said.
The company closed 17 mainland stores, and quickly decided to move administration back to Hawaii, bringing the marketing, accounting, human resources and merchandising departments with it.
The company also closed its Halawa factory, laying off 140 employees.
Meanwhile, Ralston's dream -- renovating the old Aiea Sugar Mill into an historic industrial warehouse -- had fizzled, sucking out more money, Kinard said.
The company had bought 19 acres of land in Aiea under the mill for $19 million in 1994 from Alexander & Baldwin Inc. After finding out it would cost another $38 million to clean up the mill, the company razed it for $3 million, and divided the land into 15 parcels. Crazy Shirts also took out a $5.1 million loan.
Earlier this year, the city bought nine parcels, or 6.5 acres, for $9 million, just under what Crazy Shirts had asked originally to help it service the loan.
When all the financing is complete, Crazy Shirts will have lost money on the site, Kinard said, declining to say how much.
"In hindsight, it was ill advised. It was a great dream that Rick had had," Kinard said.
Starting anew, the company is opening four stores this year, bringing total outlets nationwide to 48. Crazy Shirts blessed its newest location at the Royal Hawaiian Hotel this morning.
The company is also targeting more locations, based on how well sales are doing at current stores.
Crazy Shirts employs about 300 people, or half its total work force, in Hawaii and operates 26 stores in the islands.
Bright spots for the company include Internet and catalog sales, Kinard said. Sales through its Web site between March and September have increased 300 percent from the same period last year, he said.
The right strategies combined with a needed million-dollar investment from outside should help make the company profitable again, Kinard said.
"We're doing the right things and we need the cash to stem us through this period," he said.