Chicago Tribune from Chicago, Illinois • 52

BuIni 2 Section 4 Chicago Tribune, Monday, November 23, 1992 Survey finds shrinkage in shoplifting Oak after the company got in trouble' with the SEC for overstating income. Invesco, which still owns 20 percent of Oak's common stock, brought Antle on board to rescue the company in late 1989. In his first presentation to the board on Feb. 15, 1990, Antle swallowed hard and recommended selling two more operating divisions, taking a $14 million hit to reflect the sale and restructuring plans, and getting the corporate headquarters out of California. "We had to replace the entire corporate staff," he said.

"The easiest way to do that is to change the location of headquarters." modern 86,000 square foot plant in Sugar Grove and another in Juarez." So Oak plopped down $7.6 million and the assumption of liabilities for Grigsby on Jan. 4, 1991. The shutdown of the original Oak plant in Crystal Lake began shortly thereafter. Antle said he considered moving corporate headquarters back to Crystal Lake in 1990 after taking over, but picked suburban Boston instead to be closer to British investors of Invesco MIM Management Ltd. who had successfully engineered the proxy fight in 1989 that ousted chairman E.L McNeely and his board.

He had replaced Carter in 1984 By Wilma Randle A survey of the retail industry shows that shoplifting, or shrinkage, declined by about 7 percent in the last year, but department store retailers are still fighting an uphill battle. The survey, by Ernst Young, found a general retail industry decline in theft by employees and consumers. This decline was surprising, because usually when the economy is down, shrinkage goes up," said Bob Der, a partner and director of Ernst Young's Retail Industry Practice division in Chicago. The study said one reason for the decline in theft is that retailers across the country are spending more to protect goods from being ripped off. Der said retailers last year spent $308 million on security.

Still the increased security investment wasn't enough to help department store retailers stem shoplifting losses, which increased 4 percent last year. Overall, retailers reported a loss of $2.1 billion to shoplifting. Home-center and hardware retailers had the biggest decline in inventory loss last year, a 19 percent drop. They were followed by drug chains, with a 12 percent decline, and specialty apparel chains, which had a 7 percent decline. It was the 14th year the consulting and accounting firm has produced its annual survey of retail loss-prevention expenses and trends.

The survey is sponsored by the International Mass Retail Association and Chain Store Age Executive magazine. uuWUyLLbUu 5 5 Continued from page 1 resulted in a lemon and a massive recall. TV production was an even bigger disaster. Within five years, the company had a negative net worth as it tried to write off its pay-TV business. Red ink, shareholder suits, trouble with the Securities and Exchange Commission and a proxy flght that resulted in the ousting of the board of directors followed.

Things were so bad that the company held its 1984 annual meeting in a high school gymnasium in the upstate New York hamlet of Hoosick Falls. Some, stockholders complained that the reason was to make it difficult for them to attend. The price of a share of Oak stock dropped to $1.23 in early 1990 from a high of more than $38 in 1981, and its biggest claim to fame as the decade of the '90s dawned was that it was the subject of a Harvard Business School study on corporate collapse. But Oak survived. That survival may be a textbook case of the restructuring of American industry.

Its Crystal Lake plant now is shuttered and the firm has only 1,600 employees, 170 of them at a plant in Sugar Grove and another 120 at a plant in Juarez, Mexico. Its opulent Rancho Bernardo corporate headquarters, which in the company's Golden Age had as many as 3S0 employees, is gone. The 21 headquarters employees are now in more modest digs in Boston. William S. "Bill" Antle III, 47, an Annapolis and Harvard Business School graduate who in 1989 was brought in after the bitter proxy fight to straighten out the mess, thinks he has finally downsized Oak to the point it can survive and prosper.

At the time he was hired, the company was losing $3 million a month after shedding its most profitable subsidiaries to pay off a bloated debt. "We have 40 percent less floor space than we did two years ago, and more modern facilties," Antle "We have $35 million in cash and no debt tor speak of." That has helped stop Oak's financial hemorrhaging. The company last year reported a profit of $5.6 million despite an 11 percent decline in sales, and for the first three quarters of 1992 had earn- ings of more than $10 million on sales of $107 million both representing a substantial increase from the same period in 1991. At the other end of the corporate structure is Audrey Mercer, a divorced mother of three from Crystal Lake who now works as a parts inspector in Sugar Grove. She has seen it all in her 31 years with the company and was the lone survivor of 20 inspectors in Crystal Lake in the move to Sugar Grove.

She started at Oak on a conveyor belt assembling clothes-dryer timers, then was shifted to the TV tuner line. "We don't do either of those anymore," she said. Instead, OakGrigsby, as her division is now known as a result of a merger, is concentrating on what it does best the manufacture of sophisticated electric switches for high-technology products. "A couple of things have been happening in this industry," said James C. Home, the new president of OakGrigsby.

"The rugged electromechanical devices like the switches behind the dials on television sets have been replaced by optical encoders. The applications are becoming more software- or computer-driven. Anywhere you see a digital readout, there is an optical encoder involved." The company also makes illuminated push buttons, like the ones used on soda machines, and magnetic solenoids. The move from Crystal Lake to Sugar Grove may illustrate better than anything else what Antle has done with Oak Industries. Although Oak was forced to shed many of its best subsidiaries in the 1980s to pay off a crushing debt, it still owns other units, such as Harper-Wyman, with facilities in suburban Aurora and downstate Princeton, and Sterling that produce oven thermostats, gas burners, valves and manifolds for kitchen ranges and gas grills.

Oak also still owns a 49 percent interest in Chicago's WSNS-Ch. 44 Spanish-language station dating from its fling into pay TV in the 1970s, and Nordco a Milwaukee-based manufacturer of railroad track maintenance equipment. But the Crystal Lake plant started in 1932 by company founder Edward S. Bcssey was the firm's roots. By 1990 it had become an aging facility, expensive to operate and too large for a downsized Oak Industries.

"It cost us $1 million to $1.5 million a year just to turn on the lights in Crystal Lake," said Antle. He began looking around for something smaller and more modern. Then Standard Grigsby came on the market. It was a switchmaking competitor originally from Arlington Heights but which through consolidations and mergers had moved to Aurora and finally to a new plant in Sugar Grove. "It was a big factor in acquiring Grigsby," said Antic.

"We couldn't allow Oak to stay in Crystal Lake. Grigsby has a TO MOST AMERICA WIST CITIES With Winter coming, it's a terrific time to get going on America West. Just purchase your tickets hy Dec. 11, 1QQ2 an complete your travel hy Feb. 4, 1QQ3.

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