=DJ Sports Authority, Harrosh -2: Technically Passive
By Laura Elizabeth Pohl
NEW YORK (Dow Jones)--Private investor Joseph Harrosh, a retailer and
investor who has a history of identifying turnarounds and takeover
candidates, disclosed that he has taken a 7.07% stake in Sports Authority
Inc. (TSA), sending the stock soaring more than 23% on Friday.
In a filing with the Securites and Exchange Commission on Thursday, Harrosh
said that on July 21 he bought 2.2 million shares of Sports Authority, a
Fort Lauderdale, Fla., sporting-goods retailer.
Harrosh, chairman of closely held retailer Tri-City Sporting Goods in
Fremont, Calif., disavowed any intent to change or influence control of
Sports Authority in the filing.
"He's just a private investor," Sports Authority Chief Financial Officer
Anthony Crudele said.
Harrosh's investment history is long, and includes companies like Digital
Equipment, Comsat Corp. (CQ), K2 Inc. (KTO), Handleman Co. (HDL), and
American Banknote Corp. (ABN), Polaroid Corp. (PLD), Medaphis Corp. (MEDA)
and DataGeneral Corp. (DGN).
Technically passive, Harrosh has garnered a reputation for gaining access
to management of some of the companies in which he has invested. At Comsat,
Harrosh's investment preceded a takeover last year. Harrosh's investments
also have prompted stock-price advances.
Harrosh wasn't available for comment Friday.
Sports Authority stock was recently up 23.5% or 3/4, to 3 15/16 on heavy
volume of 3 million. The average daily volume in the stock is 366,193.
Harrosh's Sports Authority stake comes as two top executives and a director
of the retail company disclosed that they had purchased shares on July 15.
SEC filings made public Friday showed Sports Authority Chief Executive
Martin Hanaka purchased 40,000 shares; that Director Steve Dougherty bought
140,000 shares; and that CFO Crudele purchased 3,000 shares.
"We think on a long-term basis the company is a good investment," said
Crudele. "We don't believe the footwear industry could be as difficult as it
was this year," he added, citing a shifting trend from athletic footwear to
casual footwear.
Earlier this month, Sports Authority warned that its fiscal second-quarter
earnings would fall far short of Wall Street's estimates, because of weak
sales. It was the latest in a series earnings disappointments. Sales at
stores open at least a year fell 9.8% in the month ended June 20. Total
sales in the period fell 11% to $127.1 million.
Merrill Lynch analyst Mark Friedman noted the company's challenges.
"There's a good chance they can turn around in the long term, but that
timing is uncertain," said Friedman, who rates the company's stock at
neutral. "I don't see it right now in the next six months."
-By Laura Elizabeth Pohl (201) 938-5392
(END) DOW JONES NEWS 07-23-99
02:16 PM |
