HARDWARE STORE PROCEEDS WITH `DOWNSIZING'

ST. LOUIS Central Hardware moved forward with plans to downsize its 39-store chain Wednesday, by closing its stores in Cape Girardeau, Nashville, Tenn., and a discontinued merchandise store in Indianapolis, Ind.

Within the next two weeks, the hardware stores in Nashville and Cape Girardeau will have "going out of business" sales to clear its inventory.

Employees at the closing stores as well as at four stores in Cincinnati, Ohio, which may soon close were informed early this month of the company's plans to streamline operations through a combination of downsizing and revenue enhancements.

"Our reorganization strategy is proceeding on a timely, positive track," said Neil A. Marglous, president of Central Hardware. "We continue to exceed sales projections and have significantly improved earnings. With the closings approved today, these trends will be accelerated."

The proceeds from the "going out of business" sales will be placed in an escrow account and will eventually be used to satisfy, in part, claims of the company's bank group and unsecured creditors.

The company owes about $180 million to its banks. An additional $50 million is owed to creditors.

The company said it would also be talking with investment bankers about a possible sale of the chain.