MISSES

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The Business Journal’s list of the 100 most profitable public companies in Los Angeles is full of names you’ve probably never heard of and missing quite a few of L.A.’s more prominent businesses.

The missing companies include shoemaker Vans Inc., restaurateurs Sizzler International and Koo Koo Roo Inc., and realty-development companies Arden Realty Inc. and Alexander Haagen Properties.

Also missing: Spelling Entertainment, which produces “Melrose Place” and “Beverly Hills 90210,” sporting goods retailer Sport Chalet Inc., racetrack operator Hollywood Park Enterprises and insurer 20th Century Industries.

The top 100 companies on the list have a five-year average return on equity ranging from 4.7 percent to 43.9 percent.

A number of prominent companies didn’t make the cut because their performance wasn’t up to par. Twentieth Century, for example, had a five-year average return on equity of -6.6 percent.

Sport Chalet and Spelling both posted numbers in the 3 percent range.

Some companies haven’t been public long enough to be ranked, including Ticketmaster Group Inc., EarthLink Network Inc., CB Commercial Real Estate Group Inc., Metro-Goldwyn-Mayer Inc. and Arden Realty.

Many of the prominent real estate investment trusts, like Arden, were also organized in the past four years and could not be ranked.

Even if they had been public, REITs post low ROE numbers because they are required to distribute most of their earnings to shareholders, said Bryant Riley of B. Riley & Co.

Other poor performers were beset by over-expansion and intense competition, which was the case with Strouds Inc., the purveyor of household goods and linens. The retailer over-expanded and then saw competitors crop up, including Linens ‘n’ Things.

Other retail chains and restaurants stand out on the list. Sport Chalet has had to overcome losses due to poorly organized inventory and outdated accounting. But it went from a net loss in 1996 to a net income in 1997.

Vans, meanwhile, currently has the hottest line of sneakers among the skateboard set but troubles a few years ago have kept its average return on equity over five years at negative 13.3 percent.

Sizzler filed for Chapter 11 bankruptcy protection two years ago and closed several restaurants. Last June, a judge approved its financial reorganization plan. And Koo Koo Roo is trying to find the right formula for profitability.

A couple of high-profile entertainment-related companies have had their share of problems. Spelling has undergone several ownership changes, “a chaotic history,” and two of its prime-time shows are aging, said Art Rockwell of Rockwell Capital.

“They’re just not making money,” he said. “They’re obviously trying to sell the thing.”

Hollywood Park has been hurt by a dwindling public appetite for horse racing.

Some companies have struggled with problems beyond their control, such as auto insurer 20th Century Industries. The company got into homeowners and earthquake insurance in the early 1980s and was hit hard by the Northridge Earthquake, said Gerald Lewinsohn, an analyst with Bankers Trust New York.

“They lost a lot of capital and lost a lot of momentum,” Lewinsohn said. But he added that the company is trying to grow again and has strengthened its gains every year.

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