Capitol Multimedia leaving for Boston Bogin and Hoopes resign positions

new CEO is named

September 20, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

Capitol Multimedia Inc., a Bethesda-based company which develops and markets CD-based software for children, announced yesterday that it's moving its Maryland headquarters to Massachusetts by the end of the year.

In addition, Robert Bogin, the company's president and chief executive officer for the past eight years, and Catherine Hoopes, the company's chief financial officer for seven years, have resigned.

"It was a bittersweet decision," said Bogin.

"But we knew we had to consolidate and when we looked at the two areas, Boston simply had the better talent pool for us."

Bogin said the company, like many developers of children's software, has struggled under cost pressures this year because of competition and a slowdown in sales.

The company said it expects significantly slower sales in the second quarter ending Sept. 30 than in the same period of last year, when it had a net profit of $2.7 million on sales of $1.2 million. A portion of the company's profit resulted from the sale of a division.

The company struggled, said Bogin, before deciding to merge the administrative and engineering operations in Bethesda, where about 20 are employed, with creative artist and software engineering offices in Boston, where about 10 are employed. The company also contracts with independent artists and engineers for work.

The decision to shift to Massachusetts all of the operations, except an office in St. Petersburg, Russia, where a small group of artists work, was driven mostly by the fact that Boston has proved to be an easier region in which to locate and hire creative talent, Bogin said.

"When we ran an ad here, we had very little response. But up there we'd be overwhelmed with interest," he said.

Bogin said merging operations will reduce production expenses and improve the efficiency and productivity of operations.

He will remain employed by the company through December, and continue to serve as a director of the company. Hoopes, he said, has agreed to assist with Capitol Multimedia's transition to New England through Feb. 28.

Capitol Multimedia named Igor Razboff, previously vice president of production and one of the company's largest shareholders, as chairman of the board and chief executive officer. The company, which posted $3 million in earnings on sales of $4.2 million in its 1996 fiscal year, has been banking on strong revenues this year from a line of children's music and story-oriented international folk tale titles under a theme dubbed Grandpa Mouse.

Three of those titles, which were licensed to software giant Davidson & Associates for distribution under Davidson's Magic Tales label, hit the market last fall. Two more were due to be shipped to retailers this month.

Bogin said sales of the series "have been good, not great."

He said the Walt Disney Co.'s Lion King series had proved difficult to compete with in the children's CD software market.

Shares in Capitol Multimedia, fell 37.5 cents to $2.125 yesterday.

Pub Date: 9/20/96

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