The Indianapolis Star from Indianapolis, Indiana • Page 21

Section The Indianapolis Star TUESDAY, MAY 17, 1988 HA nn ounster Sill 1 Si 2 top ba 1 A Hillenbrand subsidiary strong as ever beds, are highly susceptible to fashion whims. A color or style that's in for one season may vanish overnight, leaving the manufacturer with thousands of dollars of discontinued styles to sell to close-out specialists usually at a loss. "The company that they thought was a profitable, growing, cash-rich company suddenly started losing money," said Thomas M. Cope, a stock analyst with Dillon Read in New York. Revenues slumped from $83.8 million in 1979, the first full year of Hillenbrand ownership, to $71.3 million in 1983.

Hillenbrand does not break out net income for its subsidiaries and Smith said that while Tourister has not lost money, it didn't make the kind of money to which Hillenbrand is accustomed. "Short-term wisdom would have dictated that we dispose of Tourister years ago." Smith said. However, Hillenbrand always has managed its companies for cash flow, and as long as Tourister could produce along those lines it could stay alive. In 1985, Tourister took several steps to right itself. One of its toughest actions was to close four of its six factories in Rhode Island and lay off hundreds of workers many of them Portuguese immigrants laboring at minimum wage.

Smith said Tourister has upgraded the Jobs of those who remain and no longer pays minimum wage. The International Leather Goods, Plastic and Novelty Workers Union, which represents hourly workers at Tourister's two remaining plants, declined to comment. Tourister then reorganized its sales department and gave it a new marketing focus. It quit asking salesmen to call on small customers and instead implemented a telephone sales network for those clients. This let salesmen concentrate on big, national accounts, where Smith said Tourister had an edge over smaller rivals because it could guarantee the uniformity and availability that someone such as J.C.

Penney or Service Merchandise demanded. Perhaps most importantly, Tourister has opened a string of factory outlet stores to sells its discontinued or outmoded luggage. This gave Tourister the ability to introduce more styles and colors than it might have been willing to in the past. "We can develop and Introduce much larger selections (and) types of luggage by creating a channel that allows the company to profitably dispose of a line," once it is out of fashion, Smith said. Previously, luggage that didn't sell often col-See TOURISTER Page 4 By S.P.

DINNEN STAR STAFF WRITER Batesvllle, Ind. There's a gorilla loose in the land, cracking jokes, thumping his chest and whomplng suitcases to show that his employer, American Tourister, is back and healthy as ever. The luggage maker's trademark gorilla had taken a vacation of sorts fading from advertisements just as Tourister was getting roughed up by imports and fast-changing consumer tastes. But three years into a reorganization plan, Tourister again is contributing to the bottom line for its owner, Batesville-based Hillenbrand Industries and overcoming some big problems that dogged it earlier. Some might criticize Hillenbrand, whose fortunes were made manufacturing durable goods such as hospital beds and burial caskets, for entering a field outside its realm of expertise.

But Robert C. Smith, a vice president at Hillenbrand, said during a recent interview that his firm was initially attracted to Tourister because it had so many similarities to the Indiana company. Both companies were largely family-run and built products that commanded a large share of their market (among U.S. luggage makers only Samsonite is bigger than Tourister). And Just as Hillenbrand's Batesvllle Casket Co.

is well known the funeral business, Tourister has wide name recognition among luggage makers and consumers. So in 1978. in its first diversification from those core businesses, Hillenbrand paid $85.4 million and assumed $9 million in liabilities for Tourister's parent company, American Luggage Works Inc. The firm was and remains headquartered in Warren, R.I. Smith said Hillenbrand Intended to make its acquisition pay by modernizing Tourister's factories.

Before it could act, though, fickle consumers decided that so-called molded luggage, the hard-plastic type that Tourister founder Sol Koffler pioneered after World War II. was no longer chic. According to the Luggage Leather Goods Manufacturers of America, molded and soft-sided Tourister's half-dozen plants in Rhode Island became superfluous. Next, Import volume shot up, to the point where foreign-made luggage now commands at least 70 percent of the market every year. Many of these Imports are for U.S.

luggage makers, including Tourister. To add to its woes. Hillenbrand also discovered that suitcases, unlike caskets and hospital luggage held about equal shares of the market as the 1980s began. But consumers shifted their preferences almost overnight and now Just 22 percent of their purchases are of hard-sided luggage. Soft-sided luggage requires a lot of labor to stitch and that's done most economically in low-wage countries of the Pacific Rim.

Suddenly, Locally owned Emmis to buy WXIN for $17.5 million feel that Emmis Broadcasting will enable WXIN to continue down the road to success." WXIN General Manager Joe Young tinue down the road to success," said Joe Young, general manager of WXIN. "Anytime you're owned by someone locally it helps the station to become more entrenched in the local community and enables the station to be able to react more quickly to changing events." Outlet bought WXIN in 1985 from USA Communications for $22 million. Considering the purchase price and growth of the station, one source said in March he believed the station could sell for as much $30 million. "We think it's a fair price." principal owner of privately held Emmis. "We've wanted to be in television in this market for a long time." Smulyan said no immediate changes are planned for the station.

"Nothing will be announced right now. but there are some things we are working on." Smulyan said. "Hopefully with some of our enthusiasm and commitment to the community we can enhance some things." The station has been for sale since December. Atlln, a company formed to own WXIN and another independent, WATL In Smulyan said of the $17.5 million price tag. Young agreed and said Smul-yan's timing was on the money.

"Emmis Is acquiring one of the hottest UHF stations in America," Young said. WXIN, which went on air in 1984 as an independent station, reported a monthly profit for the first time in November 1987. The station is ahead of current financial goals and "expects to make a substantial profit by the year's end," Young said. In its fiscal plans the station budgeted for an $800,000 loss See WXIN Page 4 By CHRISTOPHER BARTON STAR STAFF WRITER For the first time In several years an Indianapolis television station will be locally owned. Emmis Broadcasting Corp.

announced Monday it will pay $17.5 million for WXIN (Channel 59). The seller is Atlln Communications. The sale gives Indianapolis-based Emmis, a company on its way to becoming one of the largest private owners of radio properties in the country, its first television station. "We're real pleased," said Jeff Smulyan, chairman and liquidate Atlin's assets and repay Its debt. "We feel that Emmis Broadcasting will enable WXIN to con Atlanta, is owned by the main shareholders of Outlet Communications Providence, R.I.

The stations are being sold to INSURANCE REAL ESTATE Indiana Economy By THE STAR'S BUSINESS STAFF THROUGH THE ROOF When it comes to health Insurance, the city of Indianapolis is no different from any other employer. Its rates are soaring. Specifically, the city has learned that it must pay 39 percent more for all Prudential Insurance Co. medical plans for employees and pensioners starting July 1. As Justification for the huge hike, Prudential cited medical inflation conservatively estimated at 21 percent a year.

City officials said that the short notice left them no time to secure a replacement carrier of the past eight years. EXECUTIVE PAY DUKE PARTNER TO LEAVE One of the five owners of Duke Associates, the city's largest office-Industrial developer, is selling out. Mark J. Rou-geux will sell his 20 percent share to the other four partners as of June 30. He'll retain individual interests in about 25 Duke properties.

Rougeux will remain in Indianapolis, working with a New York business associate to buy companies in need of a financial turn-around. The move "is something I always wanted to do" and isn't part of a recent reshuffling of executive jobs at Duke, Rougeux said. Rougeux, who joined Duke in 1984, formerly worked for the real estate arm of Prudential Insurance an Investor in many Duke projects. The five-partner structure of Duke was formed in 1986 when co-founders Phillip R. Duke and John S.

Rosebrough sold their shares in the operating company. PROMOTION Emerson Kampen. 60, West Lafayette, Great Lakes Chemical. $546,000. Henry B.

Schacht. 53. Columbus. Cummins Engine. $525,000.

Edmund A. Schroer, 60. Hammond NIPSCO Industries. $343,000. Hugh A.

Barker. 62. Indianapolis. Public Service Indiana. $270,000.

AVIATION EVANSVILLE FLIGHTS CUT Eastern Airlines will discontinue service to Evansvllle Regional Airport as of July 1. Eastern cited economic considerations for ending its service, which had dwindled to two daily roundtrip flights to Atlanta. Sixteen airline employees based In Evansvllle will probably be offered reassignment, officials said. The airport is served by seven airlines. AIRPORT RUNWAY GRANT The U.S.

Department of Transportation released $22.8 million to the Indianapolis International Airport for its new runway. The federal grant Is the second installment of DOT money for the airport. Last year, the department awarded $6.3 million to plan the runway. The runway will go into service in 1989 and cost a total of $39 million. Construction begins this month.

The DOT grant comes out of the Airport and Airways Trust Fund, financed by taxes on airline passenger tickets and jet fuel. MAKE THAT SMALL BILLS, PLEASE Richard D. Wood, president of Ell Lilly and makes money for the Indianapolis firm and was paid well in return. Forbes magazine estimates in Its May 30 Issue that 61 -year-old Wood's total 1987 compensation of $4,219,902 was good enough to rank him as the 34th highest-paid chief executive officer of public companies in the country. Other Hoosier executives listed included: 1 Thomas M.

Miller, 58, Indianapolis, Indiana National Bank, $1,204,000. Richard M. Ringoen, 62. Muncle, Ball $1,043,000. Daniel A.

Hillenbrand. 64. Batesvllle. Hillenbrand Industries. $911,000.

Ian M. Rolland, 54. Fort Wayne. Lincoln National Bank. $718,000.

Zane G. Todd, 64, Indianapolis, IPALCO Enterprises, $592,000. Otto N. Frenzel III, 57, Indianapolis, Merchants National Bank. $549,000.

A CHECK IN THE MAIL A little publicity can get you a lot of things, but what it got the Indianapolis Professional Association was $5,000. The association, a not-for-profit group "organized to promote economic development, networking and black self-sufficiency," received the grant recently from Jackson Broadcasting Systems Inc. of Honolulu. The grant came "out of the blue" to the organization and followed an article that described the association and its chairman, Bernard Huff, in Black Enterprise magazine, said Indianapolis attorney Theodore D. Wilson.

The 3-year-old Indianapolis Professional Association promotes black self-determination through such activities as seminars and workshops. INSIDE Briefly 2 Business Computer 9 Data Bank 3 Indiana Report 3 Insider Trading 5 Meetings 10 Newsmakers 5 Stock Tables 6-9 Update 12.