Broadway Stores

Broadway Stores, Inc.

Company type	Public
Industry	Retail
Founded	1950s (merger of The Broadway and Hale Bros. Stores)
Founder	Edward W. Carter (president at merger)
Defunct	1996
Fate	Acquired by Federated Department Stores
Headquarters	Los Angeles , United States
Area served	United States, Canada (through acquisitions)
Key people	Edward W. Carter (president, chairman), Philip M. Hawley (president, CEO), David Dworkin (CEO)
Products	Department stores, specialty retail stores, mail order
Parent	Zell/Chilmark Fund (1992–1995), Federated Department Stores (1995–1996)

Overview

Broadway Stores, Inc. was a retail company headquartered in Southern California that operated under various names throughout its existence, including Carter Hawley Hale Stores and Broadway Hale Stores. Expanding beyond its California origins, it acquired multiple retail chains across different regions, establishing itself as a significant regional and national player in the retail industry during the 1970s and 1980s. The company successfully resisted takeover bids in 1984 and 1986, and despite filing for Chapter 11 bankruptcy protection in 1991, it managed to continue operations by divesting much of its holdings. However, by August 1995, when its financial institutions declined to provide further credit necessary for supplier payments, the company opted to sell itself to Federated Department Stores for $1.6 billion (approximately $Template:Format price adjusted for inflation). The acquisition was finalized on October 12, 1995.

Early history

During the 1950s, as Los Angeles experienced rapid population growth and emerged as a leading city in California, the expanding The Broadway department store chain, headquartered there, arranged an all-stock merger with Hale Bros. Stores, Inc.. Following this merger, Broadway-Hale Stores was formed with Edward W. Carter, then president of The Broadway, assuming the role of president for the combined company.

The expanded corporation pursued an aggressive growth strategy, extending its Broadway locations southward to San Diego in 1961 and eastward to Phoenix, Arizona by 1968. That same year, the company acquired Sunset House, a mail order business. This acquisition marked a strategic move toward diversification, with Sunset House continuing to operate independently under its existing management while providing Broadway-Hale with new opportunities through its nationwide mail order distribution network.

In 1970, the company further expanded by acquiring Emporium-Capwell Co., which served as the parent company for both The Emporium in San Francisco and Capwell's in Oakland. Despite the merger, both store names were retained in their respective Bay Area markets.

Broadway-Hale also broadened its specialty retail presence by purchasing the then three-store Neiman Marcus chain based in Dallas, Texas, in 1969, along with acquiring the national book retailer Walden Book Co.. Following these acquisitions, Broadway-Hale actively expanded these businesses across the country.

1970s–1980s

File:Carter Hawley Hale logo.png

Carter Hawley Hale logo (circa 1974)

In 1972, Prentis Hale stepped down from his role as chairman, with Edward Carter taking over the position and Philip M. Hawley—who began his career at the company as a women's sportswear buyer in 1958—being promoted to president. By 1974, the company announced a corporate rebranding to honor its top executives, changing its name to Carter Hawley Hale Stores, Inc. This renaming aimed to distinguish the corporate entity from its Broadway Stores retail division, which often caused confusion. The new title proved somewhat cumbersome, earning the nickname "Ego, Inc." among some stock market commentators. In 1984, The Wall Street Journal noted that critics accused Carter and Hawley of indulging in an "ego trip". Following Carter's retirement in 1977, Hawley was elevated to CEO.

Throughout this period, the company aggressively expanded through acquisitions. In 1972, it purchased New York's prestigious Bergdorf Goodman, and later acquired Montreal's Holt Renfrew in Canada. After an unsuccessful attempt to take over Marshall Field's in 1977, the firm acquired Philadelphia’s historic John Wanamaker’s department store for $60 million in cash during April 1978. This was followed by a stock exchange deal for Richmond, Virginia’s Thalhimers in August 1978. Contempo Casuals was added to the portfolio in May 1979. In 1980, the Emporium and Capwell's divisions merged to form a consolidated presence in the San Francisco Bay Area under the Emporium-Capwell brand, while Weinstock's expanded into Utah and Reno, Nevada. The Broadway stores were reorganized into separate divisions based in Los Angeles and Phoenix as they expanded into Colorado, New Mexico, and Nevada. Despite growth in sales, profits lagged behind expectations. A Wall Street saying attributed by The Wall Street Journal to retail analyst Monroe H. Greenstein was "God gave them Southern California, and they blew it."

In 1980, Carter Hawley Hale (CHH) began divesting units aimed at lower-income markets. The first divestiture was the Sunset House mail order division along with its mall-based novelty shops. The mail order segment was sold to Unit Buying Service Co. Inc., while the mall stores were shuttered in 1981.

Confronted with ongoing disappointing performance and two hostile takeover attempts by The Limited in 1984 and again in 1986, CHH under Philip M. Hawley's leadership responded by divesting several non-core assets. Waldenbooks was sold to Kmart in 1984, Holt Renfrew was sold to the Weston family in April 1986, John Wanamaker's was sold to A. Alfred Taubman's Woodward & Lothrop chain in January 1987, and the specialty store operations were spun off as Neiman-Marcus Group, Inc., which included Neiman-Marcus, Bergdorf Goodman, and Contempo Casuals. General Cinema (later Harcourt General), an investment firm with origins in theater ownership and soft drink bottling that had helped fend off The Limited's takeover bids, became the majority owner of Neiman-Marcus Group in 1986 as part of this restructuring. Thalhimers was eventually sold to May Department Stores Company in December 1990.

1990s Decline and Conclusion

Having reached its peak in 1984 as the sixth-largest department store chain in the United States, CHH filed for Chapter 11 bankruptcy protection in 1991. The financial distress stemmed not only from the challenges posed by the aggressive takeover environment of the 1980s but also due to intensified rivalry from competitors such as Nordstrom, which undermined the core California department store operations.

Following approximately eighteen months of bankruptcy proceedings, financier Sam Zell and his Zell/Chilmark Fund orchestrated a reorganization in 1992, acquiring a controlling 75 percent interest in the newly rebranded Broadway Stores, Inc.. The company successfully exited bankruptcy in October of that year, coinciding with Philip Hawley’s announcement of his retirement. Shortly thereafter, in early 1993, the three Utah-based Weinstock's locations were shuttered, with their leases transferred to retailers including Mervyns, Dillard's, and ZCMI.

Post-acquisition by Zell, David Dworkin succeeded Hawley as CEO. Dworkin focused on curtailing cash outflows by renovating stores and optimizing operational efficiency. By June 1994, shareholders approved renaming Carter Hawley Hale Stores, Inc. to Broadway Stores, Inc., symbolizing an intended corporate transformation; however, this rebranding was insufficient to reverse the company's declining fortunes.

The critical setback occurred on August 8, 1995, when creditors refused to extend further financing necessary for inventory procurement and supplier payments. Within a week, Broadway Stores announced its impending sale to Federated Department Stores, effectively signaling the demise of the remaining store banners under its management.

Although the acquisition by Federated was finalized on October 12, 1995, the Broadway Stores entity was dissolved in 1996. Federated consolidated Broadway, Emporium, and Weinstock's outlets with its existing Macy's California and Bullock's chains—acquired earlier in 1994—to establish Macy's West. Several overlapping locations were either sold to Sears or closed. Additionally, Federated repurposed prime real estate from five former stores (including Emporium-Capwell at Stanford Shopping Center and several Broadway sites such as Sherman Oaks Fashion Square and Beverly Center) to introduce its Bloomingdale's brand on the West Coast.

On September 28, 2006, the Market Street flagship of Emporium-Capwell was redeveloped to accommodate a new Bloomingdale's store along with an expansion of the adjacent Westfield San Francisco Centre shopping complex. Meanwhile, the former CHH corporate headquarters housed in the ex-Superior Oil Company Building at 550 South Flower Street in Los Angeles—located adjacent to The California Club, where both Carter and Hawley held membership—was transformed into a boutique hotel known as "The Standard."

Broadway

Main article: The Broadway

The Broadway represented the company's largest department store segment. Its origins date back to the Broadway Department Store, established in Los Angeles by Arthur Letts, Sr. in 1896. By 1992, the division had grown extensively across Southern California and began expanding beyond state lines. In 1979, the division was divided into two entities: Broadway Southwest, based in Phoenix, which managed stores outside California, and Broadway Southern California, headquartered in Los Angeles, overseeing stores within the state. These two divisions were reunited in 1992 following the closure of many out-of-state locations. When Federated acquired its parent company, Broadway operated 52 stores.

Hale's

File:Hale Brothers Department Store (San Francisco).JPG

Former Hale's store in San Francisco at 5th and Market in 2008

Main article: Hale's

The Hale's chain originated from The Criterion store founded in Sacramento, California, in 1880 by brothers Prentis Cobb Hale I and Marshal Hale, adopting their family name later that year. By 1936, Prentis Cobb Hale, a Stanford University graduate, was employed as a stock clerk at the family business. The company expanded throughout Northern California, including a San Francisco location at 989 Market Street by 1902, which was replaced by a new site at 901 Market Street in 1912. In 1949, Hale's acquired Weinstock, Lubin & Co., a competitor based in Sacramento; however, Weinstock's continued operating under its own name. Ironically, in Northern California, the Hale's brand was eventually absorbed into Weinstock's.

Emporium-Capwell

Main article: Emporium-Capwell

Emporium-Capwell originated from the 1927 merger between San Francisco’s Emporium Company and Oakland’s H.C. Capwell Company. This entity maintained both brand names separately and operated numerous Emporium and Capwell locations throughout the San Francisco Bay Area prior to being acquired by Broadway-Hale in 1970. Under Carter Hawley Hale’s management, there were twelve Emporium stores and six Capwell outlets before the brands were consolidated into a single Emporium-Capwell brand in 1980. At the time Federated took over its parent company, twenty-two Emporium-Capwell stores remained operational.

Weinstock's

Main article: Weinstock's

The origins of Weinstock's can be linked back to the Sacramento-founded Weinstock, Lubin & Co. At the point when its parent company was acquired by Federated, only eight Weinstock's outlets remained operational.

ERISA case

Carter Hawley Hale is notably recognized as a significant example in discussions about employee retirement benefits. Since it provided a profit-sharing arrangement rather than a traditional retirement fund, under the Federal Employee Retirement Income Security Act (ERISA) pension regulations, the trustee was not required to diversify the investment portfolio. Due to this lack of diversification and the ongoing acquisition of Carter Hawley Hale stock, the employee benefit fund experienced a sharp decline in value. This financial setback contributed to diminished employee morale, further exacerbating the company's challenges.

Advertising

Throughout much of the 1970s until The Broadway ceased operations permanently, its advertising campaigns featured memorable slogans across print, radio, and television. The radio and television spots used "It's at the Broadway," while all media outlets promoted "The Broadway is Southern California." These taglines were delivered by a deep-voiced male announcer.

See also

• List of defunct department stores of the United States