GIANT GROUP WRITES OFF STAKE IN PERISCOPE, FIRES PRESIDENT
NEW YORK — Periscope Sportswear, a moderately priced women’s and children’s apparel importer, has lost its top executive, and its parent has written off its investment in the company.
Giant Group, which bought Periscope in December 1998, said it wrote off its Periscope investment as a result of significant operating losses for 1999, and because more working capital would be needed to keep Periscope operating, according to Giant’s 10K.
Effective April 11, Giant terminated the employment of Glenn Sands as president and chief executive and appointed Ralph Stone, chief executive officer of Stone Investment Banking. Sands founded Periscope in 1977. The firm named Scott Pianin, formerly chief operating officer, president.
Stone Investment was hired to manage Periscope’s operations and negotiate with creditors, including Century Business Credit. As of March 31, the firm was in default of its factoring agreement, and Giant said there were no assurances that Century would continue to provide advances to Periscope and not demand payment on the loan.
Giant lost $46.3 million in 1999, including a $28 million write-off of its investment in Periscope. Sales at Periscope, which primarily makes private-label products, reached $76.6 million.
Kmart accounted for 30.7 percent of sales; Sears, 14.5 percent, and Fashion Bug, 10.7 percent. Other customers are Costco, Cato, Montgomery Ward, Wal-Mart and Shopko.
On a comparable basis, Periscope’s sales fell 4.3 percent due to declines of $7.3 million in women’s knit sportswear, $6.7 million in children’s apparel and $1.8 million in returns due to late deliveries. Sales of woven and imported apparel gained $12.5 million.
Sales were hampered by a reduction in available credit by its former factor, CIT Commercial, stifling its ability to buy raw materials. The loss reflects returns, markdown allowances and discounts.
Giant, based in Los Angeles, has minor equity investments in the Checkers Drive-In Restaurants and Rally’s hamburger chain.