Shareholders yesterday came looking for answers at Merry-Go-Round Enterprises Inc.'s annual meeting. Less than 30 minutes later, they left with more questions.
More than 150 stockholders, company employees and others turned out at the retailer's Joppa headquarters to witness the first major public forum for Chief Executive Officer Richard P. Crystal, the fashion chain's fourth CEO in two years.
Mr. Crystal, named in July to turn around a company in a prolonged financial tailspin, read for about six minutes from prepared remarks before a standing-room-only crowd, stressing the need to focus on better merchandising in an apparel chain of 955 stores geared toward young adults.
For the next 20 minutes, he was peppered with shareholders' questions:
Is a merger with another company possible?
Is a company sale possible?
Will more stores be closed?
What is the fair value of Merry-Go-Round shares?
To those questions and others, Mr. Crystal declined to respond.
"We wouldn't comment on a matter like that," he said early and, with some variation, often.
In a minor flare-up in an otherwise restrained meeting, 57-year-old shareholder Saul E. Danenburg of Baltimore pointedly asked the can't you discuss this? I'm a stockholder." Mr. Crystal responded by saying that some issues are not public information.
If there was tension at the meeting, it may have had something to do with the fact that sales in stores open at least a year have not registered a gain in nearly three years, while the company has closed more than 460 stores.
"Just for the record, Merry-Go-Round has plenty of [funds] -- it's called DIP (debtor-in-possession) financing. DIP financing," company spokesman Michael Kempner snapped at a reporter in response to a story in yesterday's Sun about Merry-Go-Round's mounting fees.
So far, attorneys, consultants and others have charged the retailer more than $11 million in fees to help lift the company out of Chapter 11 bankruptcy protection.
Accountants and consultants at Price Waterhouse L.L.P. alone have billed the company about $1.37 million from May 1994 through April 1995, according to court documents. But in turn, the accountants have identified for the retailer "tens of millions of dollars in potential savings," said Price Waterhouse partner Dominic DiNapoli.
Although the firm has been criticized in court for what is described as unnecessary expenses, Mr. DiNapoli defended the cost of two dinners in Baltimore, which he and other Price Waterhouse managers partially charged to Merry-Go-Round. Mr. DiNapoli said that they did not bill the company for their time.
Money has become a particularly sensitive issue for shareholders who have seen Merry-Go-Round stock plunge from high as $21.375 in July 1991 to as low as 50 cents in trading yesterday.
Mr. Crystal tried to assure shareholders that he is striving to bring about change. "While I'm making no predictions [about a turn-around], I am cautiously optimistic we'll have better results to report at next year's annual meeting," he said.
Afterward, however, several shareholders remained unappeased.
"I was quite disappointed. His [Mr. Crystal's] response consistently was, 'I can't comment.' It certainly wasn't upbeat," said 37-year-old Edward Durkee of Baltimore.
"I think the guy is a typical corporate manager where he stated corporate lines," said 43-year-old Bob Greco of Severna Park. "I think this guy has a challenging job ahead of him. But if he keeps in touch with consumers people will come back."
Stockholder Stephen Shaw, a 32-year-old Reisterstown resident, said, "I think that Mr. Crystal is a professional. He defused some ++ potentially angry questions with quick, short answers."
Mr. Crystal declined to comment after yesterday's meeting.