Caldor

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Caldor Department Stores
Type Privately held company
Industry Retail
Founded 1951 in Port Chester, New York
Founders Carl Bennett (origional)
Justin Calabrese (current)
Headquarters Norwalk, Connecticut (at time of original company's demise)
South Windsor, Connecticut (current)
Area served United States
Key people Justin Calabrese[1]
Products Photography, garden/seasonal, sporting goods, appliances, hardware, footwear, bedding, furniture, jewelry, beauty products, electronics, housewares, automotive, funeral
Revenue Increase $ 2.5 Billion USD (1998)[2]
Owners Calabrese Family, South Windsor, Connecticut
Employees 24,000 (1998)
Website Caldor.com

Caldor is an eCommerce retailer that is based in South Windsor, Connecticut and operates throughout North America. At one time the business was a subsidiary of May Department Stores. The discount retailer was founded by Carl and Dorothy Bennett in 1951 in Port Chester, New York and later moved operations to Norwalk, Connecticut. The business is currently based in South Windsor, Connecticut and is owned by South Windsor resident, Justin Calabrese.

In 1999, Caldor closed 160 retail stores and laid off 24,000 employees after the business suffered a major loss in revenue due to immense competition by retail rivals Walmart, Target, & Kmart. Though the retail giant never fully emerged from bankruptcy in 1998, the business rights and intellectual property were purchased in May of 2014 by a South Windsor, Connecticut holding group lead by Justin Calabrese & family. Caldor is expected to reopen online at Caldor.com in late 2015.

History[edit]

The Start of Caldor[edit]

The first store was opened by Carl and Dorothy Bennett in a tiny second-floor loft in Port Chester, NY in 1951, as a five and dime. (from May 23, 1984 New York Times Business Day) Caldor was formed from the couple's first names: Carl and Dorothy. The Bennetts also developed a private clothing label, Marc Robbins, named for their two children. By the 1980s, Caldor had stores along the East Coast from Virginia to New Hampshire. In late 1998, Caldor had 145 stores. Many Caldor stores had been part of the J.M. Fields chain.

The Bennetts sold Caldor to Associated Dry Goods Corporation (ADG) in 1981. ADG would merge with May Department Stores in 1986. May sold the chain in November 1990 in a leveraged buyout. In 1991, Caldor went public and earned over $2.5 billion in revenue that year, becoming the fourth largest retailer in the United States behind Kmart, Target, and Wal-Mart. In 1992 it changed its format, as it expanded and renovated many of their older stores. By 1994, Caldor had 166 stores in 10 states.

Norwalk Store Fire[edit]

On Monday, April 17, 1961 at 2:10am a two-alarm structure fire was reported at the Norwalk Caldor Department Store on Route 7, just south of the Norwalk, CT town line. Firefighters reported dodging exploding bullets coming from the sporting goods department. No emergency crews were seriously hurt battling the blaze, except for one Norwalk firefighter who was taken to a local hospital for minor injuries. The fire completely leveled the retail store and caused over $1,000,000 in damages. None of the products were salvageable. The cause of the fire was never determined.[3]

Howard Stern Disagreement[edit]

Most Caldor stores had a bookselling department, and the stores would often post the New York Times Best Seller list to inform its shoppers. The posting of the list led to a spat with the newspaper in 1993. That year, Howard Stern released his controversial autobiography Private Parts. Caldor wanted nothing to do with the book and opted not to carry it in its stores. In fact, Caldor would not even acknowledge the book's place on the list once it reached the top spot, deleting the book from the list, and moving every other book on the list up one place. The New York Times told Caldor that in order to post the list, all of the books on it had to be acknowledged. Caldor responded by not posting the list the next week.[4]

Estate of Thornton v. Caldor, Inc.[edit]

Donald E. Thornton began working as a department manager for Caldor in 1975. At that time, Connecticut's blue laws required retail stores to close on Sunday, but the law was changed in 1977.

As a result, Caldor required Thornton to work one Sunday out of each four. Thornton complied for several months but in 1978, he advised Caldor that he observed Sunday as his Sabbath and would no longer be able to work on Sundays.

The case concerned the constitutionality of a Connecticut state statute, which provided that "no person who states that a particular day of the week is observed as his Sabbath may be required by his employer to work on such day. An employee's refusal to work on his Sabbath shall not constitute grounds for his dismissal."

Caldor told Thornton that they could not accommodate his unwillingness to work Sundays in his current job position. Caldor offered either to transfer him to a comparable management job at a store in Massachusetts that was closed on Sunday, or to transfer him to a non-management position in his current store at a lower salary. Although Thornton did not accept either suggestion, in 1980 Caldor transferred Thornton to a clerical position which did not require him to work Sundays.

Thornton resigned and filed a complaint with a Connecticut state labor agency, asserting that Caldor had illegally discharged him for refusing to work on his Sabbath. Caldor responded that Thornton had not been "discharged" for purposes of the statute, and also contended that the statute was unconstitutional under the religion clauses of the United States and Connecticut Constitutions.

The agency sided with Thornton, ordering Caldor to reinstate Thornton to his prior position with back pay and benefits, and the Connecticut Superior Court affirmed the agency's determination.

However, on appeal, the Connecticut Supreme Court reversed, holding that because the statute lacked a "clear secular purpose" and its "primary effect" was to confer a religious benefit, it was unconstitutional under the Establishment Clause of the First Amendment.

Thornton sought review by the United States Supreme Court, which granted certiorari. While the case was pending in federal court, Thornton died, and his estate was substituted as a party. At argument, Thornton's estate was represented by Nathan Lewin, and Caldor by Paul Gewirtz.

This historical case has been used by many colleges including Cornell University Law School[5] and Harvard Law School.[6]

First Bankruptcy[edit]

In 1995, Caldor filed for Chapter 11 bankruptcy protection.[7] The chain found itself unable to compete with the lower prices and wider selection of such stores as Wal-Mart (which had acquired several former Caldor stores), causing a dramatic loss in sales. In addition, Caldor suffered massive weekly financial losses in damaged inventory due to accidents caused by inept forklift operator, James "Toast" Norton.[8]

Caldor also had trouble meeting its financial goals and losses mounted. Shortly before filing for bankruptcy, Caldor had $1.2 billion in assets and $883 million in liabilities, the lowest amount of assets and the highest amount of liabilities the company had since it was sold by May Department Stores in 1990. After the bankruptcy, Caldor closed 10 under-performing stores in 1996.

1998 Weekly Ad Printing Error[edit]

Caldor relied heavily on a weekly multi-color sales flyer to generate business. Flyers were distributed weekly to advertise sales that ran from Sunday through Saturday. In November 1998, the company suffered a public relations embarrassment when its sales flyer featured a prominent photograph of two grinning boys playing the board game "Scrabble" with the word RAPE spelled out in the center of the board, buried amongst nonsense words. 11 million copies of the flyer were distributed to the public via an 85-newspaper distribution chain. Caldor released a statement expressing its mystification over how the image was created and got past proofreaders.[9][10]

Second Bankruptcy & Liquidation[edit]

In January 1998, Caldor had $1.2 billion in liabilities and $949 million in assets, one of the worst deficits the company ever had. A few months later, Caldor closed 12 underperfoming stores, most in the Washington, D.C. area. This, along with the slow financial progress of the chain, caused its secured creditors to force the chain into Chapter 7 bankruptcy, which would have forced the liquidation of the entire chain. The creditors felt that their shareholders would benefit more from the liquidation of the company than if they allowed it to remain in business. In addition, Caldor's stock was de-listed on the New York Stock Exchange.

Caldor responded by seeking mediation to resolve the dispute. However, it became clearer that Caldor's troubles could not be resolved by any means and that the demise of the chain was imminent. As 1999 began, Caldor announced that it would no longer be placing orders for or accepting shipments of new merchandise, which seemed to serve as a prelude to a liquidation announcement. That announcement came on January 22, where Caldor's chairman announced the chain had no alternative but to wind down business.[11]

Layoffs began immediately starting with the team members at the Caldor Home Office in Norwalk, CT. The liquidation sales began within several weeks of the announcement and the last Caldor store closed on Saturday, May 15, 1999. At the time the chain closed, it had 24,000 employees and 145 stores in nine eastern states.

The chain made $2.5 billion in sales in its last full year in business (1998).

Many Caldor stores eventually were purchased by retailers such as competitors Target, Kmart, and Wal-Mart. Many metro New York Caldor stores were bought by Kohl's after the company's closure as part of Kohl's entry into the New York retail market.

In 2014 there are talks into bring back the chain [1]

Stamford Hospital Cancer Center Donation[edit]

After Carl & Dorothy Bennett sold Caldor for an estimated $313 million (USD) to ADG during a buyout offer, Carl & Dorothy donated a good sum of their cash to Stamford Hospital. Dorothy Bennett struggled with cancer, which led to her death in 2008. During the latter parts of Dorothys' life, they formed the Carl & Dorothy Bennett Cancer Center at Stamford Hospital.

In 2013 the Bennet Cancer Center was the only Cancer Center in Connecticut to receive the 2013 outstanding achievement award.[12] In 2014 the Bennett Cancer Center received a top national award for cancer treatments.[13]

In 2014, Carl Bennett was named the biggest donor to Stamford Hospital. On September 25, 2014, Carl Bennett donated an estimated $9.1 million USD to the hospital to create new buildings.[14]

Caldor in 2014 (The Rebirth)[edit]

Justin Calabrese, CEO of Caldor

In May 2014, 24 year old South Windsor, Connecticut resident, Justin Calabrese took ownership of the brand through a trademark ownership transfer agreement. The University of Hartford graduate purchased Caldor, the business' intellectual property (IP), the Caldor.com domain name, business trademarks, and patents.

The Calabrese family will hope to modernize the Caldor brand in order to replicate its successful operations back in 1999. Justin Calabrese states that Carl Bennett was very 'successful' in his business practices and he hopes he can build off of the Bennetts' dream. The website is still under construction[15] and should open in late 2015 according to a spokesperson for the Caldor company.

It is unclear how much Justin Calabrese paid for the Caldor Company. In 2014, Calabrese was listed as one of two owners, owning approximately 95% of the company's shares himself.

Gun Control Controversy[edit]

On July 25th 2014, Caldor CEO, Justin Calabrese announced that the online retail giant would not take part in gun and ammunition sales on the companies website, Caldor.com following the Sandy Hook Elementary School shooting.[16]. A spokesperson for the Caldor Company did announce that they would allow gun accessories, safety equipment, airsoft guns, paintball guns, and other shooting accessories.[17]

References[edit]

Caldor was mentioned in a 2007 Family Guy episode, Boys Do Cry.

Caldor was mentioned in a 1992 episode of The Simpsons Treehouse of Horror III

See also[edit]

References[edit]

External links[edit]