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The Honolulu Advertiser
Posted on: Tuesday, December 16, 2008

MORE LAYOFFS
Hilo Hattie will lay off 31 amid tourism slump

By Robbie Dingeman and Curtis Lum
Advertiser Staff Writers

Hawaii news photo - The Honolulu Advertiser

Hilo Hattie is blaming a drop in sales and a decline in visitors for its decision to let go 31 workers. The company's president called it a difficult move.

ADVERTISER LIBRARY PHOTO | October 2007

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In a further sign of the troubled economy, three Hawai'i companies have announced they will lay off a total of 123 employees over the next few weeks.

Hilo Hattie yesterday said it will let go 31 members of its Honolulu staff. The company blamed the slump in tourism and difficult economic climate for the move.

Acutron Co. Inc., a thermal insulation company, said it will shut down its operations by Feb. 13 and lay off 59 workers. Also, Unitek Technical Services LLC, an affiliate of Pacific Marine & Supply Co., notified the Department of Labor and Industrial Relations that it also will close down by Feb. 13 and lay off 33 employees.

Officials at Acutron and Unitek could not be reached for comment yesterday.

John Scott, president of Hilo Hattie The Store of Hawaii, said in a statement that the decision to lay off the workers was a difficult one to make, especially during the holiday season.

"Regrettably, we have today laid off 31 staff at our Hilo Hattie headquarters office on Nimitz Highway as a result of a precipitous drop in sales due to the increasingly harsh recession and in particular the decline in visitors to Hawai'i," Scott said. "Hawai'i is hard hit by the global economic meltdown and the consequences of that are especially tough on the retail sector," he said.

On Oct. 2, the company filed Chapter 11 bankruptcy.

Scott said the company still employs 227 people at seven stores in Hawai'i and one in California and plans to open a new flagship Hilo Hattie store at the Royal Hawaiian Center in Waikiki in July 2009.

Scott added, "The people that are leaving us are terrific employees and we will support them in their quest to find other positions.

Hilo Hattie is one of Hawai'i's most well-known retailers. Established in 1963 by Jim Romig, the company grew and largely did well over its first few decades under Romig's leadership, but got into major trouble following an aggressive Mainland expansion in the last decade.

Of seven Mainland stores, all but one were closed, and at significant cost.

Sales fell from $69 million in the 2006 fiscal year to $56 million last year and about $42 million in the most recent fiscal year ended Oct. 1.

The company earned a $500,000 profit in 2006, lost $4.6 million in 2007, and recorded an unspecified "large" loss in the most recent fiscal year.

Romig in July sold the ailing company for an undisclosed price to a California investor group led by Ted Nelson, who through another company owns franchise rights to Fantastic Sams salons in Hawai'i and California.

Nelson's group brought in Mark Storfer, a former Liberty House executive, and appointed Scott, a former Hilo Hattie official, as company president.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com and Curtis Lum at culum@honoluluadvertiser.com.