Representatives of two of the biggest stockholders of Woodward & Lothrop harshly criticized the Washington retailer's performance at Woodie's annual meeting yesterday and mustered surprising opposition to a plan to give stock options and bonuses to top executives.
Separately, the company announced tentative plans for hotels and other commercial properties on land adjacent to its stores downtown and at Western and Wisconsin avenues in Maryland. It also announced that profits jumped 80 percent in the first quarter this year, after a lackluster 1980 record.
Woodward & Lothrop has slipped to seventh place in profitability among nine major department store chains, complained Dan Kampel, a partner in L.F. Rothschild, Unterberg, Towbin, a New York investment company whose clients own 6 1/2 percent of Woodies.
Woodies' earnings per share have dropped 93 cents in the last five years, lamented another stockholder who was identified by company officials as a relative of Nancy Luttrell Orme, owner of another 6 percent of the stock.
Both dissenters urged stockholders to reject a stock option and management incentive plan that required shareholder approval.
Usually such matters are ratified routinely, winning 80 percent or 90 percent of the votes. But only 62.8 percent of the Woodward & Lothrop stockholders voted in favor of the plan, a virtual revolution by annual-meeting standards.
Woodies Chairman Edwin K. Hoffman defended the plan, noting that if management meets its goal of nearly doubling pretax profits, the incentives will amount to only 2 1/2 percent of Woodies stock. And, "if we don't make our goals, nobody gets a dime," he added.
Hoffman disclosed that the company is working on plans to build a hotel and an office building on land adjacent to both its downtown and Chevy Chase stores.
He said details will be announced in four to six weeks for a project to redevelop the block north of the downtown store, at 11th and F streets NW, into an office project and a large hotel to serve the nearby Washington convention center now under construction.
He said the ambitious plans for what is known as Woodies' North Block "could be the greatest deal in the history of this company. . . . If the deal goes through, the downtown store has got to be golden."
Quadrangle Development Corp. will be Woodies' partner on both that project and the one at Friendship Heights, where the retailer owns a large parking lot on valuable land that borders D.C.
A small luxury hotel and office building will be built there if permission to rezone the land can be obtained. Community opposition has blocked previous plans for the Chevy Chase site.
Hoffman said the company is working closely with government and private groups to remove obstacles to building on the land. "We're parking cars on land worth more than a million dollars an acre," added Hoffman.
At the meeting, he announced that Woodies' sales for the first fiscal quarter ended May 2 increased 10 percent to $71.9 million from $65.4 million, while earnings jumped 80 percent to $968,000 (39 cents a share) from $537,000 (21 cents) in the same period a year ago.
Even that good news met with skepticism from the company's critics. The Orme family representative, who refused to give his name to reporters, complained that first-quarter earnings were still 14 percent lower than in 1979 and 22 percent less than in 1978.
Hoffman said 1980 had been "a year particularly difficult for retailers," and added that this year "we see many of the same economic factors that were present during the past year, including inflation, high interest rates and unemployment."
The newest Washington Woodies at Fair Oaks Mall in Fairfax County, "is doing well and is ahead of plan, although it is having some impact on sales of our stores at Tysons Corner and Landmark," he said.
He forecast major sales gains from a store scheduled to open in August at a new Baltimore County mall and said one or two more stores will be built in the Baltimore area.
After the meeting, L.F. Rothschild partner Kampel commented, "Mr. Hoffman has set some very ambitious goals. The company has certainly not been very aggressive in the last five years."
He said the Rothschild firm, which manages pension funds that own Woodies stock, has not sought representation on the company's board although it is the largest single shareholder.
Woodies' operations also were criticized by small investors, including Louise Chesnut of Arlington, who said sales may not be improving because, "you are not providing the customers with what they are looking for."
Other stockholders applauded when Chesnut said Woodies' management should "begin at the bottom and not at the top, and find out why people are not buying and what they want."