CHRISTOPHER WOODARD Staff Reporter MRV Communications Inc. was recently named the third fastest-growing company in greater Los Angeles, but apparently no one told Wall Street. In the past few weeks, MRV’s stock has taken a nosedive in response to slowing sales. The Chatsworth-based company was lauded during Deloitte & Touche LLP’s recent “Fast 50” awards banquet for posting 2,136 percent revenue growth over the last five years, making it the fastest-growing company in the San Fernando Valley. However, the company’s stock lost more than half of its value on just one day in August after its chief executive projected lower than expected third-quarter sales. The stock has been trading around $6.50, an 83 percent decline from its 52-week high of $38.37. “It just shows how fast things change,” said Suzanne Thompson, public relations manager for Deloitte & Touche. “The ranking is based on revenue from ’93 to ’97. We have to base it on something.” MRV officials, and at least one analyst following the company, maintain that the stock is undervalued. They believe the company will more than merit “Fast 50” status in the future as the demand for telecommunications gear increases. “I think they’ve been unfairly hammered,” said Fredrik Tjernstrom, an analyst for Horizon Asset Management Inc. in New York. “I definitely see earnings and revenue accelerating.” Tjernstrom said MRV is on the cutting edge of such innovations as wave division multiplexing, a technology that allows more information, either voice or data, to be squeezed through phone lines. “I definitely think the stock has bottomed out,” said Tjernstrom. Not everyone agrees. Mark Roberts, director of research for Off Wall Street Consulting Group Inc., a Cambridge, Mass. firm that specializes in identifying short sale targets, said the company is in a “very troubled situation.” Roberts, whose company already covered its short and is no longer involved in the stock, said MRV has billed its products as being cutting edge when in fact they are more of a commodity. Meanwhile, he accused the company of inflating its earnings by taking one-time charges for acquisitions rather than billing them as operating expenses. MRV’s Chief Executive Noam Lotan said Roberts never took the time to call him and talk to him about the company’s accounting practices or its products. Lotan said the company follows Security Exchange Commission guidelines and generally accepted accounting practices in writing off certain charges for various mergers with other companies. “We’ve actually been quite conservative,” he said. “I challenge anyone to show me we’re doing anything different than any other firm.” Lotan admitted that some of the products MRV has developed, such as certain switches for local-area networks, have become something of a commodity, as other equipment makers have honed in on profitable market niches. However, the company has other products he considers cutting edge and is constantly developing next-generation products to help it remain competitive, he added. MRV Communications makes electronic components that allow computers to talk to one another, either through local area networks (systems contained in one office) or wide area networks (computers in more than one office that communicate via modem.) Mannix O’Connor, vice president in charge of sales, said the company, with its January acquisition of Xyplex Inc., is well positioned to take advantage of the growing demand for data and voice communication. MRV had specialized in local-area network devices, but its purchase of Xyplex from Simi Valley-based Whittaker Corp. for $35 million gives it the capability to compete in the market for wide-area network routers and remote-access servers. The company cut costs at Xyplex, and now has that company’s nationwide sales force selling MRV equipment in addition to Xyplex gear, said O’Connor. MRV reported net income for second quarter ended June 30 of $8.7 million (31 cents a diluted share), compared with $5.2 million (21 cents) in the like period last year. Revenues were $65.7 million vs. $39.5 million. But because of weaker than anticipated demand for the company’s products, especially in Europe, Lotan announced on Aug. 27 that revenue and net income would fall below MRV’s expectations for the third quarter. The company expects revenue to be down 10 percent to 15 percent from the second quarter, and operating expenses to increase 8 percent to 10 percent over the second quarter’s $17.4 million. Operating expenses were expected to rise due to increased costs for research and development, administration and other general expenses. Also, Lotan warned investors that some of the company’s next-generation products, which had been scheduled for release in the third quarter, would be delayed until the end of the fourth quarter. The day after the announcement, the company’s shares lost 52.6 percent of their value, dropping from $14.37 to $7.56 at the close. Frustrated by the sagging stock price, the board of directors authorized the purchase of up to 1 million shares of stock. Lotan said if you look MRV’s competitors, they’ve all been hard hit by the economic turmoil in places like Asia, and Europe. But overall, he believes the company is weathering the storm. “Actually, we’re very, very bullish on our prospects,” he said.

SHELLY GARCIA Staff Reporter Universal Studios Inc., having already agreed to slash the size of its expansion by 44 percent, is digging in its heels as residents call for an even bigger cut. A new round of public hearings on Universal’s planned $1 billion expansion gets underway this month, and surrounding neighborhood groups concerned about traffic and noise are getting ready for a major push to shrink the project. But Universal officials say they’ve already given up all the space they can. The company needs to grow in order to meet the demands of a fickle marketplace continually on the lookout for new attractions, they say. “We’re going to do everything possible to make this work for the community, but it also has to work for us,” said Helen McCann, Universal’s vice president overseeing the master plan. With 5.4 million visitors last year, Universal Studios Hollywood ran a distant second to Disneyland, which attracted 14.3 million visitors, among Southern California theme parks, according to International Theme Park Services Inc., a Cincinnati-based group that consults to the industry. If it is to compete, Universal needs the space to develop a broader array of attractions, said Dennis Speigel, the consulting firm’s president. “This is an extremely competitive market,” Speigel said. “Expansion is a necessity.” At its current size, Universal can only hope to attract visitors for a single day, and that makes the park especially vulnerable to all the vagaries of the marketplace the weather, the economy and the amount of leisure time available to consumers. Worse yet, without a wide variety of attractions, visitors tend to tire of the park. The opening of Jurassic Park The Ride in June 1996, illustrates the point. Attendance at Universal Studios Hollywood was bolstered by the opening of the popular ride, but the numbers tapered off as the attraction entered its second year. By its fiscal year ended June 30, 1998, Universal reported that paid attendance at Universal Studios Hollywood had declined 13 percent. In its annual report, the company said, “The attendance shortfall was caused by the impact of El Ni & #324;o, as well as difficult comparisons with the prior year, which benefited from the opening of Jurassic Park The Ride in June 1996.” But if Universal can provide both the attractions and the accommodations so that visitors treat the theme park as a distinct destination, the company can hope to snare a greater share of the market of visitors and keep them for stays of several days or more. “As most theme parks recognize, to keep the crowds coming, you have to constantly keep fresh and constantly expand,” said Richard Giss, a retail consultant with Deloitte & Touche LLP. “The idea of expanding retail and expanding the park at the same time makes it more of a destination stop.” Universal is seeking to add 3.2 million square feet to the development, with about half of that square footage devoted to recreational uses and the remainder devoted to office and studio additions. The company hopes to build two hotels, enlarge its theme park by 388,000 square feet, add 250,000 square feet to CityWalk, increase its office space by 1,169,000 square feet and add 450,000 square feet of studio production space. The idea is to capitalize on Universal’s roots as a movie studio, in an effort to distinguish itself from Disneyland and other competitors. “We want to be better and different from Disney,” said McCann. “Our strength is based on movie products. This is the only place where people can come and see the movies being made.” A key component of the plan is the addition of two hotels with 600 rooms each. The hotels will be located so that visitors can look out over the studios and back lots. “The majority of people come for the day and stay elsewhere,” said McCann. “What we’d like to do is extend that to a three-day length of stay.” Universal’s expansion proposal returns to public view this month when Los Angeles city and county planning officials hold a series of public hearings to gather responses to the final Environmental Impact Report for the project. Community groups are expected to make several requests, including a greater role in monitoring the progress of the development. Homeowner groups also have joined with labor unions in asking that they be allowed to review the work periodically, to make certain that additional traffic and noise generated by the project is properly mitigated. “Today, all that’s in the (master plan) is, they’ll produce an annual report which people can comment on. But big deal, it doesn’t change the development agreement if things aren’t working,” said Tony Lucente, president of the Studio City Residents Association, one of the groups opposing the development. Residents, who earlier gave their preliminary approval to the revised size of the project, also are expected to ask Universal to cut another 90,000 square feet from the development. Universal has already cut its hotel expansion by 63.5 percent and eliminated completely plans for a second theme park. McCann called the decision to eliminate the second theme park “painful and difficult,” but she insists that Universal can achieve its objectives with the plan as it now stands. “It retains the key elements we’re seeking the plan for,” McCann said. She said each part of the development the studios, the entertainment attractions and CityWalk will help to strengthen the other components. “The whole idea is, everything we add should be greater than the sum of its parts,” she said. Consultants in the entertainment industry say Universal is wise to focus on its heritage of movie making. This summer, when Paramount Pictures produced a show based on its blockbuster film “Titanic,” for example, business at its theme parks increased dramatically, according to Speigel at International Theme Park Services. But others point out that Universal is likely to have an uphill battle in Southern California regardless of its expansion. “Disney has pretty much written the book on theme park operations,” said Brian Eisenbarth, a portfolio manager with Collins & Co., an investment brokerage in San Francisco. “The thing about that industry is, you’re either No. 1 or you’re struggling to catch up.”

ALHAMBRA HOSPITAL FIGHTS LIVER CANCER WITH ICE A Southern California hospital is saving lives with ice. Marking an innovative approach towards treatment for liver cancer, positive early data has been unveiled for targeted cryoablation technology, designed to treat the disease. The data, published in the medical journal, Cancer, concludes that “cryosurgery is promising in the treatment of liver cancer, with the ability to prolong patient survival.” “Utilizing unique ‘freezing’ and temperature monitoring technology developed by Irvine-based Endocare, we are able to apply extremely cold temperatures to targeted cancerous tissue until it has been broken down and no longer exists,” said Wilson Wong, M.D., a Radiologist based at Southern California’s Alhambra Hospital and one of the authors of the Cancer journal article. “We are very encouraged by early data. Results show that targeted cryoablation can be effective in patients where surgical resection is not an effective option. In the treatment of liver cancer, targeted ablation enables us to rid the liver of more cancerous tissue while the technology’s precise targeting element allows us to spare the sections of the liver that are not cancerous.” Wong and his colleagues at Alhambra Hospital are so pleased with the success of the procedure they have launched the Cryosurgical Center of Southern California, based at the Hospital in Alhambra. Because it is one of the most malignant forms of cancer, hepatocellular carcinoma (liver cancer) is a disease that has traditionally been very difficult to treat. The reported incidence is 3 per 100,000 per year in the United States, rising to 30 per 100,000 internationally. Patients suffering from the disease generally have a poor prognosis. Targeted cryoablation is particularly groundbreaking because cancerous tumors of the liver usually cannot be removed surgically. The targeted cryoablation surgical procedures used in treating liver cancer are the latest in a growing series of temperature-based technologies utilized at Alhambra Hospital, including similar targeted cryoablation procedures that have exhibited success in treating prostate cancer. The Cryosurgical Center of Southern California is located at Alhambra Hospital, they can be reached by calling 818-458-4787.

WADE DANIELS Staff Reporter In the first of what is likely to become a regular occurrence, an auto dealership owned by Wayne Huizenga’s Republic Industries is on the San Fernando Valley Business Journal’s list of the top 15 new-car lots. Magic Ford in Valencia, which Republic purchased last year from the lot’s financially distressed previous owner, is ranked in the No. 2 spot on the list with sales of 4,275 new cars sold in 1997. Republic’s presence on the list is likely to expand because it is rapidly acquiring and establishing dealerships in Southern California. In recent months, the company, which owns the AutoNation chain of dealerships, accumulated more than 50 dealerships in the region. Burbank city officials recently said Republic is negotiating for space in a 103-acre development taking shape there. Republic offered no comparative sales figures for Magic Ford in 1996 because it did not own the lot that year, said spokesman Jim Donahue. He refused to comment on sales figures for this year so far, but did say the lot “is not in financial distress.” “I can say that we’re pleased with the lot’s progress,” he said. Jay Gorman executive vice president of the 1,500-member California Motor Dealers Association, said his information suggests little has changed at Magic Ford. “Based on my report, I haven’t seen an increase in sales from (the level posted by) the previous owner,” Gorman said. Magic Ford’s 1997 sales were a far cry from those of No. 1 Galpin Ford, which reported sales of 12,121 new cars in 1997. The North Hills lot is one of two on the list owned by Galpin Motors Inc., which was founded in 1947 and which has been owned by Bert Boeckmann since 1968. His other dealership, Galpin Jaguar-Lincoln-Mercury sold 1,974 new cars last year, placing it sixth on the list. The encroachment of auto superstore chains like AutoNation will eventually become a threat to smaller dealers, analysts say. AutoNation, a group of 38 used-car dealerships around the country, offers no-haggle pricing and a large selection that is difficult for other dealers to match. “As a major company, (AutoNation) has more leverage in lowering borrowing costs to finance dealer inventories. They can significantly reduce their interest rates,” said Cheryl Bostater, an analyst with Chatfield Dean & Co. in Denver. Some Valley dealers deny they are under siege. “They will bring in healthy competition,” said Lenny Schrage, vice president, general manager and chief financial operator of Sage Holding Co., owner of No. 4-ranked Universal City Nissan Inc. “Those companies will be spending a lot of money on advertising, which will increase consumer product awareness. That will benefit us.” Schrage also said he does not feel threatened by auto superstores because he believes the no-haggle concept, favored by AutoNation, will not be well received in the Los Angeles market. “The one-price philosophy might work in some markets, but most dealers here agree that people like to (negotiate) the best deal they can,” Schrage said. The management at No. 7-ranked Star Ford in Glendale has been adapting to an increasingly competitive environment in recent years by improving its parts and service operations. “Five or six years ago, we weren’t competitive in parts and services but now our prices compare with discount places like Jiffy Lube,” said Steve Busjaegger, vice president and general manager of the Star Auto Group, which owns the lot. “This helps attract people who may one day come back to us when they are looking for a car.” The emergence of superstores is another step in the continuously evolving car sales market, and poses no bigger threat to Star’s business than other changes occurring in the marketplace, he said.

WADE DANIELS Staff Reporter Pierce College officials are in talks with biological technology industry officials to set up a new biotech complex on a piece of the campus’ unused farmland. Pierce President E. Bing Inocencio said the likely tenants would be private companies working hand-in-hand with the school’s science and agriculture programs, providing internships and job opportunities to students. The center would help the school meet its goal of bringing in at least $800,000 a year from new projects to be developed on the roughly 200-acre parcel. “I’m very confident we’ll have a (biotech) project,” Inocencio said. The school has yet to issue formal requests for proposals for the development, which must be collected and submitted to the Los Angeles Community College Board by mid December, Inocencio said. In addition to a biotech facility, the school likely will solicit proposals for other projects, such as a golf course, he added. Ahmed Enany, executive director of the Southern California Biomedical Council, a local industry group, said a Pierce project would be similar to a proposed $80 million biotech park at Cal State Northridge, which received final approval from state university trustees Sept. 16 from state university trustees. That facility, which will be built on 28 acres of the school’s north campus, will serve as the new home for Sylmar-based biomed firm MiniMed Technologies Inc., and is intended to give science students hands-on experience in the field. “We believe we can set up something that fits very well with the biology or chemistry departments, that can strengthen the campus educationally but also would be of benefit to the industry,” said Enany, who explained that a 60- to 70-acre parcel would be optimal for the center, though it could be managed on as little as 40 acres. Enany said that a 40-acre biomed facility could generate enough rent money for the school to meet it’s $800,000 a year goal aside from revenue from a golf course or any other project. The MiniMed project at CSUN will pay about $850,000 a year in rent for 28 acres; a 40-acre development at Pierce is likely to generate more than $1 million a year, Enany said. A Pierce College facility likely would have little trouble finding tenants, Enany added, as there are more companies looking to locate expand in the Valley area than there are suitable facilities or developable land. He said the Biomedical Council has begun talks with a number of local and out-of-town firms about setting up facilities at Pierce, though he declined to name any of them. “Firms that would benefit from being there are the kind that may be extracting medication out of plants, or doing agricultural biotechnology kind of work, or animal husbandry,” he said. “These would be the kind of firms that wouldn’t violate the land-grant mission and would not disrupt the kind of zoning that exists there.” Bob Scott, vice president of the Los Angeles city Planning Commission, said the proposal sounds promising. “It fits in with the educational mission of the school, which is to create job readiness for people living in the San Fernando Valley,” said Scott, who is also co-chair of the Valley Industry and Commerce Association. “It would mean clean, community-friendly industries.” Pierce College was founded in 1947 as an agricultural school to train World War II vets for farming jobs. At the agricultural program’s height in the 1970s, more than 2,000 students were enrolled, though that number has dwindled to only a few hundred each semester. There are now several dozen head of cattle, sheep, chickens and other livestock, as opposed to more than 1,000 a couple of decades ago. The college has been searching for ways to exploit its underused farmland and at the same time bolster its curriculum. The college also says it needs to generate some $800,000 a year to update and fund its course offerings. In addition, that amount must increase by 10 percent every five years for at least 20 years if the school is to continue to keep up with demand, according to a plan approved by the Community College District on Sept. 9. Last year, budget cuts forced Pierce to cut 29 percent of its classes. Inocencio said it is unclear how much land will be allocated for either the biotech facility or a golf course, though a golf industry consultant said that the minimum space needed for an 18-hole course is about 140 acres. A number of golf-course developers, including the Lake View Terrace-based Hansen Dam Equestrian Center, are expected to submit proposals, he said. After decades as a Valley fixture and educational resource, the possibility that Pierce will develop its farmland has generated some controversy from nearby neighborhood groups. Organizations are particularly miffed that the college may solicit bids for a golf course, with some questioning the educational benefit of such an enterprise. Inocencio defended the proposal, arguing that a golf course could provided opportunities for students to study things like turf management and golf-course superintendence, which he termed a “growing industry.” “The farm that we have now is obsolete and needs no more than at the most 80 acres, so you cannot say that we are abolishing it,” Inocencio said. “The way agriculture is done in the real world is quite different from what is being taught here. More and more people are doing farming with a lot of technology and computers.” Gordon Murley, president of the Federation of Hillside & Canyon Association, opposes a golf course, partly because it would use up a great deal of land but also because it would benefit the education of only a small number of students. He also is critical of building a biotech campus on the farmland, saying the presence of companies on the campus would damage the educational process. “The only thing the students will learn (in internships) is what those corporations want, instead of preparing them to get a job with any company in the field,” Murley said. By launching a biotech campus at Pierce, the school would join in a growing trend where colleges are becoming directly involved with the biotech industry, which has become a fast-growing sector of the state’s economy. In addition to CSUN’s partnership, for example, UC San Francisco also is designing a 43-acre biomedical research campus with the idea that companies would locate near university labs. And USC and UCLA are both raising funds to build $100 million biotech research labs. Inocencio said in mid September that Pierce lawyers were preparing request-for-proposal (RFP) documents detailing the type and scope of development projects the college is looking for. He said he expected separate RFPs to be issued for a golf course, a biotech facility, and possibly for other types of projects. He mentioned, for example, that there was interest from at least one company to set up a culinary arts facility and curriculum. Such a program could well complement the agricultural curriculum, Inocencio said. “The funds will mean a revitalization of our agricultural facilities, and we will be looking closely at what will they give us for what they ask of us,” Inocencio said.

SHELLY GARCIA Staff Reporter The New York-based buyers from Bloomingdale’s have been spending a lot of time in California lately. Since opening to bell-ringing business about two years ago, sales at the chain’s four Southern California locations have been good, but not great, according to store executives. So as Bloomies’ third holiday season on the West Coast approaches, the store is working to fine tune its merchandise more closely to the preferences of Southern Californians. And that means learning more about local tastes. “What we’ve done in the last three to four months is increase our learning curve,” said Michael Gould, the department store’s president and chief executive. “As we’ve tweaked our assortments, business is getting stronger.” The chain’s 1996 opening in Southern California was marked by a number of successful, high-profile charity events that brought in huge numbers of shoppers and raised expectations that it would be an economic boon to other retailers in the malls where the stores are located. Since then, however, things have returned to business as usual. “We haven’t seen a significant change (in customer traffic),” said Ali Hashemian, president of California Orchards, which has a store in the Sherman Oaks Fashion Square mall. “We were surprised. We were expecting more.” Analysts point out that Bloomingdale’s has not remained in the top of every shopper’s mind. “They created an enormous stir when they first opened, but since then you have not continued to hear the level of excitement,” said Richard Giss, a partner in the trade retail services group of Deloitte & Touche LLP. “They’re a player, but they’re not blowing away the competition.” Gould said that part of the problem stems from the early results, which unrealistically raised expectations. “We opened up in a blaze of glory, and like everything else, it settled down to more normal levels,” he said. “What we’re experiencing now is some good business, some outstanding business in a number of areas. Overall, we’re on plan.” Still, he concedes that Bloomingdale’s has missed the mark with some of its selections, and the store has been working to change that. This holiday season, Southern California shoppers can expect to see different, lighter weight fabrics and a more colorful assortment of clothes. “You’ll see less black,” Gould said. “We are putting much more color in the assortments, and we’re seeing results.” Matching its assortments to local tastes is particularly important for Bloomingdale’s, analysts said. The store doesn’t always compete on price against rivals like Macy’s and Robinsons-May, both of which promote sale prices heavily in newspaper ads. That means Bloomingdale’s has to rely on its merchandise to succeed. “They’ve got to have merchandise that’s responsive to the California market,” said Giss. Even with the in-house expertise of a number of top store executives who have worked and lived in Southern California previously (Gould himself is a former Bullock’s executive), adapting to local tastes has not been easy. “When you’re buying for stores all over the country, I think it is a little more difficult,” Gould said. Bloomingdale’s has had to adapt not only to the differences between shoppers in New York and Southern California, but also to differences among Southern California shoppers. Tastes within the New York area do not vary much from Manhattan to Long Island, but that’s not the case in Southern California, where, Gould said, there can be significant swings in style from Sherman Oaks to the Beverly Center. “That’s the thing that surprised our organization, that stores relatively close to each other have distinct personalities,” Gould said. To better understand the needs of the individual stores, Bloomingdale’s buyers and merchandise managers have increased the time they spend in Southern California, not only at the stores here, but at the local merchandise markets as well. In July, the Fashion Square store hosted a Sherman Oaks Homeowners Association party that helped neighbors get acquainted with the operation, said Richard Close, president of the association. “What we found was, before the event, most people figured it was a high-prestige, New York store,” Close said. “The event made them feel it was more like their community store.” Partygoers spent some $42,000 on purchases during the dinner and dance event. That’s the kind of publicity Gould is betting on. “The key to our growth is not advertising in the media,” he said. “The key to our growth is word of mouth.” Instead of attracting customers with splashy ads announcing sales, the retailer plans to focus on its reputation for carrying exclusive merchandise and being the first with new fashions. “We’re never going to be known as the lowest price retailer,” Gould said. “What you’re going to see is more emphasis on is ‘Only at Bloomingdale’s and ‘First at Bloomingdale’s.” Gould said research shows that customers come to Bloomingdale’s almost exclusively because of its reputation for fashion. “No other store do they say that about,” he adds. To help get its fashionable message across, the store for the first time is going to be inserting its fall catalog into some local newspapers. “I think some of the changes will bode well,” Gould said.

SHELLY GARCIA Staff Reporter Business is good these days at the Dominion Saddlery in Burbank, which recently added new racks of riding britches and jackets, a large assortment of sun hats, books and 12 styles of boots all for children. Among the new items is a steeplechase vest for kids that the store formerly sold in adult sizes only. “The vest sells for $100. Obviously, there’s disposable income there,” says Linda McRae, the store’s manager. Kids have asked their parents for ponies for generations, but only lately have so many baby boomers been able to indulge their children’s expensive whims. Adults too are taking up the sport of horseback riding, fueling a mini-boom for the saddlery stores and riding stables in the Rancho Equestrian Neighborhood, which takes in parts of Glendale and Burbank at the north end of Griffith Park. “Starting four years ago, business went down in luxury goods because of the economy,” said Roland Davis, who owns Damoor’s Seed and Hay. “Two years ago, business started picking up again.” With riding lessons costing $30 a session and the price tag to train a horse running into the thousands of dollars (not counting the cost of food, boarding and medicine), horseback riding will never be a sport for the masses. But enthusiasts and those who follow the sport say the number of recreational riders has increased. In addition to children, adults are taking up the sport, some for the first time and some who have returned after a long absence. Unlike other sports, youth isn’t a prerequisite for horseback riding. According to the most recent figures available from the American Horse Council Foundation, there were 642,000 horses and 606,300 riders in California at the end of 1996. Although the group has no comparative figures to draw from, it believes ridership has increased in recent years. “The general consensus is, on the whole, interest is increasing,” said Molly Chaffinch, a spokeswoman for the national trade organization. “It’s not dramatic, but it is slightly up from a few years ago, and there is an increase in people’s interest in riding for recreation.” Damoor’s is one of about six shops and a number of stables that dot the tiny enclave along Riverside Drive and Victory Boulevard. Davis also produces equestrian shows, such as a barrel-racing event held at the Los Angeles Equestrian Center, where, he says, the increased interest in riding is most evident. The purse for the most recent event, held in January, jumped to $80,000 from $20,000 in the prior year. “In the last two years, there’s been a huge increase in the industry,” said Davis, who has owned the store for 12 years. The fortunes of the horse-riding industry trail the economy by several years, because it takes longer to unload a horse than it does to say, sell a boat, experts say. Likewise, the horse-riding upturn that’s just beginning, is not expected to peak for several more years. But the brightened outlook already is reflected in the activity in the Rancho Equestrian Neighborhood, an area so named by the homeowners, many of whom keep horses in their backyards and use the trails that lead through Griffith Park. Several of the area’s stables and stores have changed hands in recent months, and a few new shops have opened. The heightened interest has also helped the Los Angeles Equestrian Center, which has struggled to retain its financial footing since two previous owners went bankrupt. Since acquiring the center in 1990, LAEC Inc. has pumped more than $1.5 million into refurbishing the 72-acre facility that supplies boarding stables, training for horse and rider and an annual calendar of horse shows and other events. “We have made it profitable,” said Kenneth Lowry, general manager for the center, noting that it took five years to get the center into the black. He declined to provide more specific revenue and income figures. Lowry credits a lot of the turnaround to new financial controls the company put in place. Keeping an eye on the bottom line is a discipline often lacking in an industry characterized by horse-lovers rather than good managers. But the center also has worked to market its events to attract a broader audience than the traditional horse enthusiast. The shows’ announcers now provide the uninitiated with background information and anecdotes in much the same way that announcers at other kinds of sports events provide narration. Other acts, like clowns and musical performances, have been added to the programs. The food concessions have been improved, and there are discounts offered on group sales, said George Chatigney, events coordinator. The center also has increased the number of horse shows it offers by about 30 percent over the past four years. And this November, the Grandprix will feature a new sponsor, Calabasas Motor Cars, the first sponsor not directly related to the horse industry. Chatigney said the efforts are starting to pay off. One of its more recent shows, the Memorial Day Classic, filled the 2,000-seat grand stand at the center along with about 100 VIP tables, a 7 percent increase over its best, previous turnout. But the high cost of maintenance is still the center’s biggest challenge, Mowry said. Feeding each horse takes 20 pounds of alfalfa cubes each day. “If a mucker (stable hand) gives a horse a couple more scoops a day, at the end of the month, you’ve spent an additional 3,000 bucks,” said Mowry. Add to that the cost of electricity, water and grounds upkeep, to name just a few of the expenses, and “it’s like running a small city.” Because of the high costs and the limited market, most of those who go into the business of boarding and renting horses or retailing equipment, are themselves riders, motivated more by love than by money. “If you do everything right, you can make a living,” said Cathy Nickell, who opened the Rocking C Boarding and Training Stables about four months ago. But it takes more than knowing about horses to do everything right, she adds. “Somebody could have a horse and know how to take care of their horse, but taking care of 68 horses is a big job.” In retailing, most of the shop owners have carved out areas of specialty to avoid head-to-head rivalry for so limited a market. Dominion, which calls itself the “Nordstrom’s of tack stores,” carries its own designer brand of apparel and a large selection of high-end jewelry, gold and silver necklaces and bracelets with horse themes. The Paddock Shop Inc., a 67-year-old apparel and tack shop, operates a national catalog business that accounts for about 30 percent of its sales, said Buddy Gordon, owner of the family-held business. There is also a 10,000-square-foot annex next door to its store, and a full-time leather craftsman, who can customize and refurbish saddles, boots, bridals and other equipment on premises. And one of the newest shops on the street, the Circle F Tack & Laundry, which provides laundering services for horse blankets and covers, also sells such hard-to-find items as equine sunglasses for riders and special imported collars that keep flies off the horses, said Alan Fischer, a former CPA who opened the shop earlier this year. Fischer, who also rides, said he’s not worried about making a go of the shop. “I think there are more people that are horse owners than in the past,” he said. Movies like Dances With Wolves and the Horse Whisperer have been attracting newcomers to riding, he added. “Anytime you have one of these movies, you get a lot of people coming in to rent horses,” Fischer said. “Some of them go on to become (horse) buyers.”

ELIZABETH HAYES Staff Reporter Not since the earthquake has business been this good. That’s what some hardware stores are finding anyway. With the economy still on an upswing and home values rising notwithstanding Wall Street’s recent volatility homeowners are buying plumbing, paint and fixtures like never before. At least not since the 1994 Northridge quake. “There’s definitely been a real uptrend all this year, especially since March,” said Dean Wilson, general manager of the 60-year-old Koontz Hardware in West Hollywood. “We see a lot of particularly high-end people re-fixturing new knobs, cabinet pulls. That’s up quite a bit.” The good times appear to be widespread for hardware stores, from Echo Park to West Hollywood to Culver City to South Central to the San Fernando Valley. “The hardware business is directly proportional to the economy. When the economy is better and more people are working and interest rates are lower, our business definitely swings up,” said Rob Barber, owner of Stellar True Value Hardware Co. in Culver City. Business is the best it’s been since the quake, he said. Sales have risen in the past 12 months by a little less than 5 percent at Economy True Value Hardware in North Hills, said owner David Swedlove. “(Customers) are back to replacing faucets. There’s a lot of plumbing, electrical and garden. Where people let things slide, now they’re fixing them,” Swedlove said. “They feel better about the general financial climate.” Several other store managers said they, too, are seeing people who put off certain upgrades during the recession now deciding the time is finally right for reinvestment especially with housing prices hitting their highest level since 1991. Many customers are people who have recently bought homes in areas where the housing stock is older and often needs some work. “A lot more people have been moving into the neighborhood that have a little bit of extra money, and they’re fixing their houses up. The neighborhood is rejuvenating,” said Jerry Laska, owner of Peerless Hardware in Echo Park. There’s also a certain amount of speculation investment by those who want to take advantage of the rising market by buying fixer-uppers to resell at a premium. “They’ll find a decent neighborhood with a crummy house and fix it up. That’s where they’re spending more,” said Kenny Tashman, vice president of Tashman Screens & Hardware in West Hollywood. “As the real estate market has improved, it’s picked up.” While business is not as strong for Tashman as it was in the aftermath of the earthquake, it has picked up in the latter half of the year. Sales have also picked up for Burris Ace Hardware, which is at the northern edge of South Central L.A. an area with lots of turnover in the housing stock and do-it-yourself improvements. “In the past two months, there’s been a huge increase of walk-in clientele buying materials for their houses drywall, cement, building materials. A lot of people are modernizing garages into bedrooms,” said Derek Burris, manager and part owner. Also making home improvement more feasible is the fact that interest rates are relatively low. “They’re refinancing, getting a better deal and they may say, ‘Let’s put that kitchen in or lighting or paint.’ Everyone has a laundry list,” Tashman said. “People didn’t do things for many years and now they have money in their pockets.” Another factor that has contributed to brisker sales, particularly for paint, is El Ni & #324;o. The heavy rains may have dampened business at the time, but they also left many homeowners with leaks and other problems that necessitated a trip to the hardware store. And many want to paint and repair problems before the rains hit again this year. “El Ni & #324;o helped us,” Barber said. At Koontz Hardware, Wilson said sales in the shop’s housewares department which purveys appliances, towel bars and cookware are up 30 percent since 1994. While those kinds of items might not have been a priority for homeowners after the quake, plumbing supplies certainly were. The plumbing department did a roaring business after the quake. Still, plumbing sales were up 10 percent in August, setting a new record, Wilson said. “People always know bathrooms and kitchens pay off in the value of your house. If you don’t have confidence your house is a good investment, you probably wouldn’t do that,” he said.

JESSICA DREBEN Staff Reporter Dust those saddles and sharpen your spurs, Hopalong Cassidy is back for all his loyal “little neighbors.” William Boyd, the actor who portrayed the gun-slinging cowboy in black, has been dead for more than 20 years, but his persona lives on. Hopalong Cassidy Enterprises, a division of U.S. Television Inc., is hoping for a Hoppy revival marketing everything from videos to lunchboxes with the cowboy’s name and likeness. “There are more than 70 million people over the age of 45 who grew up in the Hopalong Cassidy era,” said Jerry Rosenthal, president of Tarzana-based Hopalong Cassidy Enterprises. “He was very popular and a lot of people are interested in collecting Hoppy items.” Rosenthal’s target audience is not just limited to baby boomers. He’s also reaching out to children. His plan is to get more Hoppy films on television so a new generation will become acquainted with the character. Rosenthal says he is in talks with 18 television stations to license the Hoppy films. His major target audience, however, remains Midwesterners who are already familiar with Hopalong Cassidy from childhood. “Hoppy was a good role model for children and adults and we want to keep the tradition alive,” said Rosenthal. “We want to get everyone into Hoppy.” Rosenthal bought the rights to Hopalong Cassidy’s persona in 1985 from Boyd’s wife, Grace Bradley Boyd. Almost immediately thereafter, the company filed numerous infringement lawsuits against those allegedly engaged in unauthorized use of the cowboy’s image. That litigation took up the majority of Rosenthal’s time until 1995. “There were a number of individuals that would copy the products and sell them and we would sue,” said Rosenthal. “It would cost thousands of dollars every time. We lost a lot of money. So we decided to just put out a better mousetrap,” referring to new, improved Hoppy products. The company’s revenues have increased from $500,000 in 1995 to more than a $1 million in 1997 most of that coming from licensing Hoppy films to TV stations. The other big money maker is the Hoppy video set, which sells for $69.95. Other items include Hoppy belt buckles, lunchboxes, water bottles, watches and even a 6-foot, 3-inch Hoppy cutout. Rosenthal also is marketing more than 900 original Hoppy items dating back to the 1930s. Boyd had lent his name and likeness to more than 2,400 different products from the 1930s to early 1950s. And some of those items can fetch a pretty penny on the collector’s circuit. Rosenthal said a Hopalong bicycle goes for $11,000, a Hoppy bunk-bed ladder can fetch up to $50, a toy chest anywhere from $100 to $250 and an original Hoppy nightstand sells for $300. Jeff Lotman, chief executive of Global Icons, a company that owns the commercials rights to the likenesses of James Dean and W.C. Fields, said the Hoppy merchandise will do well, though it will never bring in the kind of revenues a bigger star can generate. “The memorabilia market is really strong,” said Lotman. “Products that were made in the ’30s and ’40s sell for thousands of dollars. The stuff is worth a fortune. (Hopalong) was very big during his era. I guess he would have a very definite following.” The entertainment memorabilia market generated more than $16 billion last year, according to Lotman. Aiming to capture as much of that as possible, Rosenthal in addition to selling new and old Hoppy merchandise and the TV rights to Hoppy movies just cut a deal with Hallmark Cards to create three Hopalong Cassidy tree ornaments. There is also an ad campaign in the works, but Rosenthal says it hasn’t been budgeted yet. Hopalong Cassidy was a character created by writer Clarence E. Mulford, and was featured in Mulford’s novels about the Bar 20 Ranch. He called the character Hop-A-Long because the character had a game leg. The original character was a gun-slinging, roughneck cowboy, but Boyd devised a softer personality. By the end of World War II audiences knew “Hoppy” as the good-guy cowboy in black who rode a white horse. Hoppy appeared in more than 66 feature films and had his own television program that ran for seven years. Boyd also starred in 104 radio shows as Hoppy. “We are dealing with a classic product here,” said Rosenthal. “Hoppy appeals to everyone.”

CHRISTOPHER WOODARD Staff Reporter Jerry’s Famous Deli Inc. has a simple credo: “Repeat business is our lifeblood.” But with a sharp drop in profits, the Studio City-based company is showing signs of anemia. Net income for the second quarter ended June 30 was $108,404 ($.01 cents per fully diluted share), compared with $153,863 ($.01 cents) for the like period a year ago. Revenues were $16 million vs. $13 million with the increase coming from Epicure Market, a gourmet store in Miami Beach the company bought last April. Shares of the company’s stock, which trades on Nasdaq under the symbol DELI, was trading around $1 a share last week down from the $4 range a year ago. Concerned that the company’s stock is not trading for what it’s worth, the board last week announced plans to buy back $300,000 worth of shares in the hope of boosting the price. Company officials say sales at Jerry’s Southern California delis are down for a variety of reasons including bad publicity after the flagship Studio City deli was featured in a KCBS-TV Channel 2 report on unsanitary conditions at L.A. restaurants. As a result of that story, the store was closed for 27 hours by Los Angeles County health inspectors, who said they found health violations, including unclean utensils and food not being properly refrigerated. But company officials concede there may be other problems, and for the first time they have hired a marketing consultant to conduct focus groups with customers and employees to pinpoint areas that need improvement. “We’re trying to really improve from within, and improve based on knowledge of what our customers and our employees think of us,” said Isaac Starkman, the company’s chairman and chief executive. “I think it’s a step in the right direction, and I see it as positive.” In a ranking of restaurants by sales conducted by the San Fernando Valley Business Journal, Jerry’s Studio City restaurant dropped from the No. 2 position in 1996 to the No. 3 spot in 1997. It was bested by the Sagebrush Cantina in Calabasas, which had $8 million in sales in 97, compared to $7.8 million in sales for Jerry’s Studio City operation the same year. Gladstone’s Universal once again topped the list as the highest grossing restaurant, with $10 million in sales, and Bistro Garden at Coldwater in Studio City again came in just behind Jerry’s in Studio City with $7 million in sales. Jerry’s, which went public in 1995, operates 11 restaurants nine delis in Southern California, and the Epicure Market and two Wolfie Cohen’s Rascal House restaurants in Florida. Arthur M. Manask, a Burbank-based restaurant consultant, said the company would be wise to take a hard look at the way it does business. “Jerry’s is in a very, very competitive segment of the industry, fighting against family dining establishments like the Mimi’s, Millies, Denny’s, Du Par’s, Daily Grills,” said Manask. “They’re really right in the middle of it.” Speaking as a customer, Manask said he believes Jerry’s isn’t as competitive as it could be with service and prices, especially when compared to other chains targeting the same market, such as Daily Grill. “They can’t just look good, they’ve got to be good,” he said. After the Channel 2 story, Starkman said the company conducted a top-to-bottom review of its food preparation and handling practices and all its L.A. County stores now have the highest “A” rating. “That did not help,” Starkman said of the brief but well-publicized closure. “I think there was a drop-off in business, but it’s hard to tell.” Starkman said sales were also hurt by the end of 24-hour operation at four of the company’s delis and by El Nino rains, which kept some customers away. Manask, however, said he believes the focus groups will likely identify more serious problems. “I think it’s to some degree a bury- your-head-in-the-sand mentality to blame it on El Nino or the Health Department issue,” he said. “Because the restaurant industry is so competitive, they’ve got to be the best in everything they do, quality, service, price and d & #233;cor.” Peter Romeo, editor of Restaurant Business magazine, said restaurants of all types are having a difficult time due to increasing competition. “So many restaurants are opening up, coming on stream,” he said. “The supply of restaurants is outstripping demand. Everyone is settling for a smaller piece of a smaller pie. In L.A., the city approved permits for $3.3 million in new restaurant construction in the first half of 1998, compared to just $480,000 in permits for the same period last year. Existing restaurants spent about $2 million on renovations and expansions during the first half of the year, compared to $340,000 for the same period in 1997, city records show. “New players, strong regional players, are growing like weeds, ” Romeo said. “That tends to dilute everyone’s sales.” Although saying he is “very concerned” about the chain’s profits, Starkman said he is confident the stores have hit bottom and will begin to rebound, especially as the company hits its peak season in October when customers increasingly look to a hot cup of chicken soup. “We are concentrating fully on the quality of service and the quality of the food to make sure Jerry continues to be what it’s always been, a community gathering place,” he said.