Broadway Stores

From Wikipedia, the free encyclopedia
Jump to: navigation, search

Broadway Stores, Inc. was an American retailer based in Southern California. Known through its history as Carter Hawley Hale Stores and Broadway Hale Stores over time, it acquired other retail store chains in regions outside its California home base and became in certain retail sectors a regional and national retailer in the 1970s and 1980s. It entered into Chapter 11 bankruptcy in 1991 and, eventually, its assets were completely sold off.

Early history[edit]

The chain's beginnings date from The Criterion store founded in Sacramento, California in 1880 by the Hale Brothers, Prentis Cobb Hale I and Marshal Hale and adopted their name later the same year. By 1936, scion Prentis Cobb Hale worked as a stock clerk in the family store after he graduated from Stanford University. The company had expanded throughout Northern California, including a location at 989 Market Street in San Francisco by 1902 (replaced in 1912 by a location at 901 Market Street). By 1949, the company had acquired its rival Weinstock, Lubin & Co., based in Sacramento.

In 1950, as Los Angeles began to grow in population very rapidly and assumed dominance within the state, the fast-growing The Broadway Department Stores (founded in 1896) based there negotiated an all-stock merger with Hale Bros. Stores, Inc. Edward W. Carter, president of The Broadway, became the president of Broadway-Hale Stores.

The newly enlarged company began to grow aggressively with its Broadway stores expanding south to San Diego in 1961 and east to Phoenix, Arizona in 1968. In 1969, the company acquired Emporium-Capwell Co., itself the holding company for Emporium in San Francisco (and suburbs) and Capwell's (H.C. Capwell Co.) in Oakland (and suburbs) and adopting their respective names in the San Francisco Bay Area.

Also in 1969, Broadway-Hale acquired the then 3-unit Neiman Marcus specialty department store based in Dallas, Texas, and the Walden Book Co. (known more commonly as Waldenbooks) and began to actively grow those businesses nationwide.

The 1970s-1980s[edit]

In 1972, Prentis Hale retired as chairman, Edward Carter assumed the chairmanship and Philip M. Hawley (who started as a women's sportswear buyer in 1958) became company president. In 1974, in a news release it states, CHH stated that to reflect the executives' contributions, the corporate parent was adopting the name Carter Hawley Hale Stores, Inc. The new name was a major tongue twister, and stock analysts sometimes called it "Ego, Inc." In 1977, Carter retired. Hawley was appointed CEO.

The company continued to be an active acquirer, in 1972 acquiring Bergdorf Goodman in New York, Holt Renfrew of Montreal, Canada, the very famous Sunset House in Los Angeles, and Walden Books, which it purchased from K-Mart. After attempting an ill-fated, unsuccessful hostile takeover of Marshall Field in 1977, the company acquired the venerable but tattered John Wanamaker's of Philadelphia for $60 million (cash) in April 1978. That was followed by a stock swap for Thalhimers of Richmond, Virginia in August 1978. Contempo Casuals was a May, 1979, takeover. Emporium and Capwell's were merged to form a unified San Francisco Bay-area presence as Emporium-Capwell in 1979, Weinstock's moved into Utah and Reno, Nevada, and The Broadway stores were split into separate Los Angeles and Phoenix-based divisions as the chain expanded into Colorado, New Mexico and Nevada. Sales increased, but profits did not. The saying on Wall Street was "God gave them Southern California, and they blew it."[citation needed]

Faced with continuing poor results, and two hostile takeover attempts by The Limited in 1984 and 1986, the company, still led by Phillip M. Hawley, reacted by first selling Waldenbooks to K-mart in 1985, Holt Renfrew to the Weston Family in April 1986, Wanamaker's to A. Alfred Taubman's Woodward & Lothrop in January 1987 and then splitting off the desirable specialty store business as Neiman-Marcus Group, Inc. (encompassing the Neiman-Marcus, Bergdorf Goodman and Contempo Casuals stores). The company that had rescued Carter Hawley Hale from The Limited takeover-attempts, theater owner/soft-drink bottler-cum-investment company General Cinema (later renamed Harcourt General) assumed majority ownership of Neiman-Marcus Group as its reward. Thalhimer's was sold to May Department Stores in December 1990.

The 1990s and the end[edit]

From its heights in 1984 as the sixth largest department store chain firm in the United States, CHH fell into Chapter 11 bankruptcy in 1991. Besides the financial problems of surviving the 1980s era of hostile takeovers, the main California department store business had faltered because of increasing competition from Nordstrom.

In 1992, after one and one-half years of bankruptcy negotiations, financier Sam Zell and his Zell/Chilmark Fund completed the reorganization of the newly renamed Broadway Stores, Inc., taking a 75 percent stake. In early 1993, the three Utah-based Weinstock's stores were sold to Dillard's, Mervyns and ZCMI.

The newly streamlined company was short-lived, however. In August 1995, Federated Department Stores agreed to acquire Broadway Stores. The chain was dissolved in 1996 as Federated consolidated the former Broadway, Emporium and Weinstock's stores, along with its own Macy's California and Bullock's chains (acquired in 1994), to form Macy's West. Several duplicative units were sold to Sears or shuttered, while Federated also used the real estate of five stores (Emporium-Capwell Stanford Shopping Center, Broadway Sherman Oaks Fashion Square, Broadway Century City Shopping Center, Broadway Beverly Center, and Broadway Fashion Island Newport Beach) to finally bring its Bloomingdale's chain to the West Coast.

On September 28, 2006, Emporium-Capwell's Market Street flagship was redeveloped to house another Bloomingdale's location as well as an expansion of the adjoining shopping center Westfield San Francisco Centre. In addition, the one-time CHH Corporate Offices at 550 South Flower Street, right next door to The California Club (of which Carter and Hawley were members), were converted into a three-star boutique hotel called "The Standard."

ERISA case[edit]

Carter Hawley Hale also is known as a famous case study regarding its retirement plans. Because it offered its employees a profit-sharing plan, and not a retirement fund, under the Federal ERISA pension plan law, the trustee was under no obligation to diversify the fund. Because of the nondiversification and continued purchase of Carter Hawley Hale stock, the employee fund soon was stuck with a precipitous loss in value. Its employees’ low morale contributed to its problems.[1]

Advertising[edit]

The longtime print and television/radio media advertising slogans during the 1970s until The Broadway closed for good were "It's at the Broadway" (radio and television only) and "The Broadway is Southern California" (all media). A baritone male voice over announcer provided the verbalized slogan.

See also[edit]

References[edit]

  1. ^ Monks, Robert A.G. Corporate Governance. Malden: Wiley, 2004. Pp 434-435.

External links[edit]