Washington's enigmatic Haft family is at it again-tilting at windmills, confounding the press and securities analysts and making money -- lots of it.
Herbert Haft, his wife Gloria and their son, Robert -- the principal owners of Dart Group Corp. and related companies, Crown Books and Trak Auto -- rekindled speculation in one of retailing's biggest guessing games last week when they disclosed ownership of 6 percent of the stock in Safeway Stores Inc.
Will Herbert Haft take control of Safeway, move its headquarters to Landover and, with his knowledge of the region's consumer market, clobber corporate neighbor and former drug chain competitor Giant Food Inc.? The percentages say bet the bankroll against all the beans, bananas and broccoli in Safeway's stores that the Hafts won't be in control of the nation's biggest supermarket chain a year from now.
It's also a safe bet that the Hafts will walk away with a handsome return on their investment in Safeway and that they will send another chief executive scrambling for his book on antitakeover strategies.
The Hafts eventually will buy a regional or national retail company, if they don't start another discount operation in some yet unidentified niche. Herbert Haft has stated on several occasions, after selling the Dart Drug Corp. retail chain, that Dart Group wants to buy another retail company.
For the time being, however, the Hafts appear to be more interested in playing a high-stakes investment game. If they fail in an attempt to take over a major national retail chain, they can always sell their holdings in that company at a profit and continue their search for an easier mark. Their attempts to date have fallen into a well-defined pattern. First, Dart Group flirted with a bid to acquire May Department Stores Co. It subsequently initiated abortive attempts to buy Jack Eckerd Corp. and Revco D.S. Inc., two leading drug chains, and tried unsuccessfully to take over giant Beatrice Cos.
Safeway has vowed to fight a takeover attempt by a newly formed entity owned by the Hafts. If this latest takeover bid fails, the Hafts will simply fold their tent, collect a huge profit on their investment in Safeway -- analysts estimate a gain of at least $12 million -- and take their mouse-tries-to-swallow-elephant act to a friendlier boardroom.
It might become necessary along the way to establish stronger credibility in the investment community and retail industry, however. Securities analysts often complain that they know little about Trak Auto and Crown Books because company officials refuse to talk to them, a complaint that made the rounds when the Hafts owned Dart Drug.
"They don't talk to us, and I don't know anybody they do talk to," one analyst said.
"Herbie is sort of the Greta Garbo of the corporate world," said Eliot H. Benson, vice president and director of research at Ferris & Co. Inc.
Meanwhile, analysts and other observers continue to wonder why the inscrutable Hafts would sell a fairly successful regional retail drug chain, only to go shopping later for another drugstore chain. The fact that Drug Fair, a competitor under previous owners, was a candidate for a buyout made the move all the more intriguing.
A bigger question, it seems, is whether the Hafts can successfully apply their expertise in operating specialty discount books and auto parts stores to managing major national retail chains with vastly different markets, merchandise lines and distribution networks. A persuasive and attractive offer for another retail company could make that a moot question. Still, given Dart Group's refusal to open up to the investment community, officials might be hard-pressed to sell their retail prowess to investors, especially in the wake of recent performances by Haft-controlled companies.
"They've not had tremendous successes with these new ventures, as far as the public is concerned," one analyst observed.
Not only have Dart Group's earnings fallen sharply (74 percent) in this year's first quarter, but Trak Auto's net income was down a whopping 75 percent last year and off 22 percent in the most recent quarter. Trak Auto West, the division that was partly owned by Thrifty Corp., has been plagued by losses the past three years. Trak West's performance is all the more disappointing because the elder Haft had counted heavily on the Los Angeles market's huge concentration of autos to produce outstanding results.
In the meantime, Crown Books' income increased marginally in the last quarter after declining slightly in the prior period.
Dart Group's earnings might not affect its quest for a new company but its goal of becoming a major national retailer might hinge on credibility as much as it does buying power.