Trying to bolster management while it goes through Chapter 11 bankruptcy reorganization, Merry-Go-Round Enterprises Inc. yesterday named a veteran department store and boutique merchant to run its flagship division.
On Aug. 1 Frank Tworecke will become president of the Merry-Go-Round stores unit, a 500-store chain that forms the core and corporate soul of the Joppa-based fashion retailer.
Now senior vice president and general merchandise manager for Federated Department Stores Inc.'s Lazarus division, Mr. Tworecke fills the last important vacancy on the team Merry-Go-Round officials have said they need to turn the company around.
He reports to company President Michael Sullivan and Chairman Leonard "Boogie" Weinglass. Mr. Tworecke replaces Paul Levine, who left Merry-Go-Round just before declining sales and cash flow problems forced the company to seek bankruptcy protection on Jan. 11.
Mr. Tworecke, 47, has his work cut out. Hurt by inventory problems and double-digit sales declines in established stores, Merry-Go-Round Enterprises has continued to record operating losses this year.
Mr. Tworecke said he doesn't believe that the Merry-Go-Round division is beyond repair.
"It's not a major reconstruction," he said. "The chain needs a focus. It needs a direction. It needs a discipline. And it needs a momentum on the sales side."
He declined to offer a more specific prescription, saying he needed to spend time learning about the chain.
At Lazarus, a 50-store, $1.3 billion chain based in Cincinnati, Mr. Tworecke has been in charge of men's, young men's and children's goods -- but not women's, which he'll need to deal with at Merry-Go-Round. But he said his responsibilities included women's apparel in a previous position, as a top merchant at John Wanamaker department stores in Philadelphia.
He spent four years at Lazarus, where, among other things, he found out what it was like to operate a retailer in bankruptcy proceedings. Federated sought Chapter 11 protection after being loaded with too much debt.
Before joining Lazarus, Mr. Tworecke ran his own, small chain of boutiques, in strip shopping centers, called the Oxford Blue Sweater Co. He sold the concern, he said.
At Merry-Go-Round, which aims its apparel at men and women ages 15 to 25, Mr. Tworecke is being hired for his management and operating abilities as much as his clothes-selection skills, said Mr. Sullivan. "We think we have good young buying talent that has good style picking abilities," Mr. Sullivan said. "Frank's job will be to organize them . . . and get the business more focused and under control."
Indeed, Mr. Tworecke will have little influence on merchandise selection for the fall season. Most of it has already been bought, and Mr. Tworecke said he has seen little of it. But analysts expect him to contribute in the areas of store presentation, pricing, inventory management and other areas.
Merry-Go-Round shares closed at $2 yesterday, unchanged from Wednesday.