Carter Hawley Hale Stores

Carter Hawley Hale Stores was an American retailer based in Southern California. Known through its history as Broadway-Hale Stores and Broadway Stores, over time, it acquired other retail store chains in regions outside 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

The chain's beginnings date from The Criterion store founded in Sacramento, California in 1880 by the Hale Brothers (adopting their name later the same year). By 1936 scion Prentis Cobb Hale worked as a stock clerk in the family store after graduating 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 at 901 Market Street). In 1949 rival Weinstock, Lubin & Co. based in Sacramento was acquired.

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 aggressively grow 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

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

The company continued to be an active acquirer, in 1972 acquiring Bergdorf Goodman in New York and Holt Renfrew of Montreal, Canada. After attempting an ill-fated hostile takeover of Marshall Field's in 1977, the venerable but tattered John Wanamaker's of Philadelphia was acquired in April 1978, followed by Thalhimer's of Richmond, Virginia in August 1978 and Contempo Casuals in May 1979. 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."fact|date=February 2008

Faced with continuing poor results, and two hostile takeover attempts by The Limited in 1984 and 1986, the company reacted by first selling Waldenbooks to Kmart 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

From its heights in 1984 as the sixth largest department store chain firm in the United States, it fell to 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 with the growth of Nordstrom.

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

The newly streamlined company was short-lived, however, as 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 28 September 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.

ERISA Case

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 was soon stuck with a precipitous loss in value. Its employees’ low morale contributed to its problems.

Advertising

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.

External links

* [http://www.ragm.com/library/books/corp_gov/cases/cs_chh.html Carter Hawley Hale - A Corporate Governance Case Study]
* [http://www-gsb.stanford.edu/cebc/pdfs/C_EC_002_QRS.pdf John Simon & QRS Case Study (page 1 mentions demise of Carter Hawley Hale and Federated's acquisition of assets)]