Four for Sheraton

Boston's bustling Sheraton Corp. took its first step off the North American continent last week. For $18 million, Matson Navigation Co. agreed to sell to Sheraton its four Honolulu hotels: the pink Royal Hawaiian, the porticoed Moana, the seven-year-old SurfRider, and the eleven-story Princess Kaiulani--all on famed Waikiki beach. Sheraton, second only to Hilton Hotels Corp., thus got 1,056 more rooms, boosted its total to 26,200.

Matson is selling out because its Hawaiian investors, who own 42% of the company, are clamoring for the line to concentrate on shipping, sell off its many holdings in the oil, insurance, trucking and hotel fields. Matson's California investors, who own the majority of stock, have agreed to dispose of the hotels but oppose the other sales. Management's split runs so deep that there is talk of liquidating the whole company.

For Sheraton President Ernest Henderson, 61, who has been in a partnership with Chairman Robert Lowell Moore, 62, ever since the two left Harvard ('18), the Matson deal was the biggest of a year in which they have acquired eight hotels. There are now 52 Sheraton hotels, and more are abuilding. Early next year Sheraton will open a $12 million, 561-room hotel in Dallas and a $3,500,000, 190-room unit in Binghamton, N.Y. Due to open later: new Sheratons in Baltimore, New Haven, Conn. and Portland, Ore.

But expansion costs have cut profits. Last week Sheraton announced that earnings for the six months ended Oct. 31 dipped to $1,810,881 from $2,481,549 in the same period last year. Another reason for the drop was that a subsidiary, Thompson Industries, Inc., which Sheraton bought in a burst of diversification in 1946 and which has grown into a $23 million-a-year auto-parts maker, suffered from the auto recession. Also, Sheraton has been building and buying so much that it plans soon to float a $25 million nonconvertible debenture issue carrying a fat 7 1/2% interest. Said Henderson: "I think we've got enough to keep us busy for a long time.''

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