The Salina Journal from Salina, Kansas • Page 23

The Salina Journal BRIEFLY Local dealer unhurt by Schwlnn's woes The bankruptcy protection taken by Schwinn Bicycle Co. this fall has meant little change for Burgess Schwinn Cycling and Fitness Center. 155 S. Fifth. As a dealer of Schwinn bicycles, the Salina store is not part of the Chapter 11 reorganization under way at the Chicago-based company.

Schwinn officials estimate the company has debts of $55 million to $60 million. Store owner John Burgess wasn't too surprised by the move. 'We knew they were having problems," he said. "There was so much talk of bringing someone in (to buy part of the company). 'I think it's a question of getting their ship in order.

They've been an industry leader too many years to let a little thing like this do them in." Since the bankruptcy filing, Burgess Schwinn has received shipments of bicycles and accessories. The 67-year-old store plans to continue carrying the Schwinn line. "We're here to stay," Burgess said. Sutherlands may develop in Salina Sutherlands, the Kansas City, based lumber company, owns property in Salina that it would like to develop. A company spokeswoman said Sutherlands is considering plans to develop the land but has not made a decision.

She declined to say where the property is located. Sutherlands operates lumber and hardware stores in several mid- western and southern states. Kennedy and Coe among top 100 firms Kennedy and Coe, a Salina-based accounting firm, has received national recognition for its work. Bowman's Accounting Report, an Atlanta-based newsletter for the accounting industry, ranked Kennedy and Coe among the top 100 certified public accounting firms in the nation. The newsletter considers management decisions and fiscal performance in naming the top firms.

Kennedy and Coe serves clients through 17 offices in Kansas, Nebraska, Oklahoma and Colorado. Lovewell Lake road receives recognition Lovewell Lake access road project in Jewell County has been recognized by a state engineering association. The Kansas Consulting Engineers awarded the project its 1992 Kansas Public Improvement Award in competition for counties with less than 10,000 residents. The project is an all-weather access road to the lake and park. It includes three miles of grading, four miles of paving and five new bridges.

The $979,000 project was funded by the state. J.H. Shear's Sons of Salina and S. A.M. Construction of Arapahoe, were project contractors.

Pharmacies win trade journal praise Several area pharmacies have been recognized for their sales and services by a trade journal. Drug Topics, a pharmacy magazine, recognized Patterson Health Mart Pharmacy of Clay Center for exceptional services and Key Rexall Drug of Wichita for overcoming competition. Key Rexall operates stores at 2024 S. Ohio and 1103 W. Crawford.

Dillard's sales increase 22 percent LITTLE ROCK, Department Stores has announced third quarter sales of $1.1 billion, a 22 percent increase over the same period last year. Dillard's had sales of $954.9 million in the third quarter of 1991. Net income for the quarter rose 13.7 percent, from $39 million last year to $44,4 million this year. Through Oct. 31, Dillard's had sales of $3.1 billion for the year, a 17 percent increase over $2.7 billion the previous year.

Dividend unchanged from KPL parent board of directors of Western Resources Inc. declared Wednesday a dividend of cents on the energy company's common stock for the fourth quarter of 1992, unchanged from the third quarter. That brought this year's dividend rate to $1.90, compared with $1.86 in 1991. From Staff and Wire Reports MONEY Classified Page 27 Sunday, November 22, 1992 23 Retailers see merry Christmas season ByALANSTOLFUS Salina Journal This is Bob Koch's 10th Christmas season selling hazelnut coffee, dry soup mixes, candles, speciality kitchen utensils and other items at his store, The Koch House, 155 N. Broadway.

Kicking off its holiday season, the store will have a Christmas open house today from noon to 5:30 p.m. This could be the best Christmas ever for the gift shop. "Last year was the best Christmas we've had in the nine years we've been in business," Koch said. "We're expecting a real good response (this year). People seem to be even more excited about it than they were last Koch's optimism is supported by other Salina merchants who also are looking for a generous shopping season.

"If the present trend continues, we'll have an outstanding Christmas," said Sears manager Lee Mason. Mason and other merchants attribute current strong sales and their optimistic outlook to a solid local economy. A weaker national economy has seemed to have little effect locally. To Tim Frederking, owner of Del's Electronics Center, 1859 S. Ninth, a good Christmas season depends on a good attitude.

"A large part of it is that, not only consumers' attitudes but retailers' attitudes," he said. "We haven't been overly swamped, but I think it's going to be a good year." Sears has had strong sales each month since this past spring, and Mason expects that to continue through Christmas. What makes the strong sales "even more surprising," he said, is that the store is now into its second year at Central Mall. The newness of the store has worn off on customers. The Christinas shopping season is well under way at Sears and other stores.

"We don't wait until after Thanksgiving like people say," Mason said. Shoppers are already putting video cassette recorders, televisions and camcorders on layaway at Del's Electronics. "In our industry there's not a lot of large impulse items," Frederking said. "If they're looking to buy someone that TV or VCR, they try to start (shopping) a little earlier." Early indications at mart, also lean toward a merry Christmas, manager Gary Wickersham said. Toy sales began picking up in September, and Christmas items started selling in mid October.

"We're looking favorably for a good Christmas," Wickersham said. "I don't think we've ever had a bad Christmas. Salina over the last few years has never suffered as much as the national news leads you to believe." Christmas is not the biggest season of the year for The Golf Shop, 1805 S. Ninth. Rather, spring and early summer is.

But store owner Rick Beets expects decent Christmas sales this year. Won Weinzirl, owner of Classic Trends, 2344 Planet, hopes this season will be better than last year's. A year ago, she said, shoppers worried about the economy curtailed their shopping. Sales, so far, have been stronger. "People are buying pretty good," Weinzirl said.

"They're not penny pinching too much." ByALANSTOLFUS Salina Journal If you needlt, Kay Schubert probably has it. Or had it. Or will get it. But you'll have to take your chances of finding it in her secondhand store that features unclaimed freight, antiques, collectibles and leftover items from closed businesses. There's no telling what she'll have or when.

"When I say I've got everything, I'm not kidding," Schubert said. One thing is certain Schubert's store it's hard to miss the Pink Elephant. From the yah put front that's decorated like a pink elephant to the pink elephants painted on boarded-over windows, Schubert lets her building advertise itself. And then you walk inside. The walls of the store also are painted pink; "It just drives everyone mad," Schubert said.

"People ask me if my house is pink." Yel Schubert has lived in Beloit for about nine years and operated the Pink Elephant for more than two years. It started with a Ben Journal it many Itenu In her Balolt ttore, the Pink Elephant. rummage sale. She had so much for the sale, she needed a place to have the sale. She rented a downtown building for the sale.

"It went over so big that I decided it was fun," she said. Schubert began operating the Journal graphic by Monte Baker store on Fridays and Saturdays, taking Friday off from her full- time job at Smith Insurance. After six months, she left the insurance company and Opened the Pink Elephant five days a week. "When I started out, I thought I had a tremendous day if I made $20," she said. Now, the store is open seven days a week and making between $300 on weekdays and $500 to $700 on weekend days.

"The only day I'm closed is Christmas and that's optional," she said. "It's just been a tremendously successful business." The store is open 10 a.m. to 7 p.m. Monday through Friday and 9 a.m. to 7 p.m.

on Saturday and Sunday, Schubert calls her store "The Best Uttle Warehouse in Kansas." Shoppers will find a myriad of items. Appliances, tools, used and new clothing, toys, nuts and bolts, electronic equipment, furnace filters, chalkboards. She also has about 9,000 baseball cards for sale. Peggy Gottschalk of Salina has shopped at the store. "She's just got everything," Gottschalk said.

"It is just a wonderland for secondhand lovers." Gottschalk operates a child- See HER, Page 24 Bank failures could cost workers their pensions Last of two parts NEW you're covered by a company pension plan, get ready for a shock. Any money that plan keeps in a bank or may soon lose most of its protection under federal deposit insurance. Big and small companies need to check this out immediately. Workers should show this column to their employers. If your company does bank some of its pension-plan funds, ask for written assurance that those funds remain federally insured, This startling new risk arises from the Federal Deposit Insurance Corporation Improvement Act, whose provisions started taking effect a year ago.

Congress' intent was to lower the drain on the federal deposit insurance fund, by encouraging customers not to deal with unsound banks. In the past, if your company invested pension assets in a bank's certificates of deposit, every person in the plan was individually protected by $100,000 worth of deposit insurance. A15- person plan would be insured for $1.5 million. But starting Dec. 19, this extensive protection will be granted only to pension plans that are STAYING AHEAD Jane Bryant Quinn THE WASHINGTON POST kept in strong and well-capitalized banks.

If your plan is kept in a weak bank that fails, the FDIC will pay only $100,000 total, no matter how many employees are covered. The rest of the plan is uninsured, and could lose a lot of money. The company may be liable for the loss, but that's not a sure thing. Both employer and employee are at risk. Formerly, even uninsured deposits were generally covered, when a foundering bank was bought by another institution.

From 1988 1991, uninsured deposits were rescued 85 percent of the tune. But under the new law so far, uninsured deposits have been rescued only 46 percent of the time. So it's more likely a bank failure will wipe out some pension-plan deposits, too. What's a "weak" institution under this law? The full explanation is far too lengthy for this space, but I'll give you the technical definition, provided by FDIC attorney Claude Rollin: A weak bank has "either a total risk-based capital ratio of 8 percent or less; or a Tier I risk- based capital ratio of 4 percent or less; or a leverage capital ratio of 4 percent or less." Here's the million-dollar question: How does a company find out whether its bank fails one of those three government-devised tests? Turns out, that's not easy. You can turn the problem over to the adviser who administers your pension plan, and ask him or her to calculate the ratios from the bank's financial statement.

But the adviser has to know how. "The risk-based numbers are anything but easy to calculate," Rollin says. 'The easiest thing to go for is the leverage capital ratio." But, he adds, the leverage ratio could be high, while one of the other ratios is low. So knowing just one ratio isn't enough. Another option is to ask your attorney to write to the bank's attorney, asking for official confirmation of the bank's capital status.

By Nov. 16, the FDIC will have mailed preliminary notification to the banks that are undercapitalized or worse, stating what their three ratios appear to be. The banks aren't required by law to disclose them to customers, but they should voluntarily if asked, Rollin says. Still, on a matter of this importance, should a pension plan rely on a bank's word? If it's wrong, and the bank fails, the employer may be liable for the loss. Furthermore, you'll need to check on the bank's capital status every quarter, lest it fall into the "weak" category without your knowledge.

At present, the FDIC isn't disclosing the capital status of weak banks, for fear of causing runs. Yet the very reason the law was changed was to discipline bad banks by pushing customers to leave. Like it or not, runs are part of that process. As matters stand now, savvy companies will move their pension plans to stronger banks, while those that didn't get the message may suffer a devastating loss. Rollin says that the FDIC is having internal discussions as to whether capital ratios will be released.

Given the risks to innocent depositors, the answer should be yes..