By  on June 1, 1994

NEW YORK -- Will Carter Hawley Hale have enough cash for the rough times ahead? Factors are mulling the question following CHH's 10 percent drop in earnings last quarter and expected losses through the next two quarters of fiscal 1995. There's also a much-needed $336 million, three-year store renovation program kicking off this season that will make the Los Angeles-based department store chain more competitive but further sap funds.

"If the bleeding continues for another six months like it has over the past year, I feel we will have to start putting some pressure on them," said one factor.

"I sure as hell hope they turn it around," said a second factor. "They claim they are going to do better...but it remains to be seen."

Last November, the company floated a $143.8 million private placement of bonds, raising cash and buying some time to pull off a turnaround. New management, led by David Dworkin, chairman and chief executive officer, have been at it for about a year.

CHH emerged from Chapter 11 reorganization in October 1992.

"Right now, we are a short-term lender," said one credit executive. "There are no problems getting paid or shipping because of the tremendous amount of cash they have. No clients have backed away from CHH."

"We're checking them for $3 million to $4 million for 60 days to 90 days," said another factoring executive, who said there's no reason to worry about CHH's current condition.

He has long-term concerns, however. "I don't know if they are going to be able to turn it around," he said. "Everyone has questions. No one knows what is going to happen in September. Will the economy be strong? Will there be more cash at CHH? How much longer will Samuel Zell continue to make the big bucks investments." Zell, general partner in Zell/Chillmark Fund, owns about 70 percent of CHH's outstanding common stock. "Eventually, this company has got to make money," the factor added."There comes a time for everybody to say, 'No more."'

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