Harold's

Harold's

File:Harolds-logo.png
Industry	Retail
Founded	1948
Founder	Harold G. Powell
Defunct	2008
Fate	Bankruptcy Liquidation
Headquarters	Norman, Oklahoma (1948–2001) Dallas, Texas (2001–2008)
Products	Men's and women's apparel
Number of employees	624 (before bankruptcy filing)

Harold's Stores, Inc. was a specialty retailer of upscale classic men's and women's clothing, initially based in Norman, Oklahoma and later headquartered in Dallas. The company managed 43 outlets across 19 states in the southern, western, and midwestern regions of the United States. Before filing for bankruptcy, the workforce numbered 624 employees. The firm was legally declared bankrupt and ordered to liquidate on November 10, 2008.

History

Established in 1948 by Harold G. Powell in Norman, Oklahoma, Harold's initially focused on men's apparel. While distribution and operational activities remained in Norman, the purchasing offices were relocated to Dallas, Texas. The brand specialized in high-end clothing for men and women, positioning its stores predominantly within affluent neighborhoods and shopping centers throughout the southern, western, and midwestern United States. Its primary customer base consisted of individuals aged between 30 and 50.

Women's clothing was introduced to the product line in 1958. In 1977, Harold's launched its proprietary credit card program. The company went public a decade later in 1987 and issued its inaugural clothing catalog by 1990. By 1999, the chain had expanded to 53 locations across 22 states. At its height, Harold's employed approximately 1,800 staff members and generated annual revenues exceeding $150 million.

In Houston, stores operated under the name "Harold Powell" due to a 1992 gentlemen's agreement with Harold Wiesenthal of Harold's Men's Wear, who had been serving that market since 1950. However, by 1996 Wiesenthal claimed that customer confusion had increased and initiated legal action against Powell’s company. Before proceeding to trial, both parties reached an agreement late in 1996 whereby Powell consented to alter the design of catalogs distributed in Houston rather than merely applying a sticker to indicate the different store name.

Leadership transitions

In May 1998, Powell relinquished his leadership role when his daughter, Rebecca Powell Casey, who had joined the firm in 1977 and served as CEO since 1992, assumed the position of board chairman. Prior to that, Casey held the presidency from 1989 until 1992, a position previously occupied by Bernard H. Newburg, former president of Bonwit Teller. In February 2001, Clark Hinkley succeeded Casey as CEO of Harold's, and by June of that year, the company discontinued all catalog and online ordering operations due to financial losses. After refocusing on its primary retail activities and achieving seven straight months of increased store sales, Harold's reintroduced its catalog sales in September 2003. Hugh Mullins, formerly affiliated with Neiman Marcus, took over as CEO in February 2004 but resigned in August 2005. Following Mullins' departure, Hinkley returned as interim CEO. Casey stepped down from her role as executive vice president in January 2006 for personal reasons, citing a loss of confidence in the company's management within her resignation letter. In October 2006, Ronald S. Staffieri, previously president of Michaels Stores, was appointed CEO, succeeding Hinkley.

Decline and bankruptcy

By 2001, control of the company had shifted to preferred stockholders Howard Lester of Williams-Sonoma and Ronald de Waal, formerly associated with Saks. That same year, the corporate headquarters relocated to Dallas, and Casey resigned from his position as CEO. Over the following years, Lester and de Waal extended substantial loans to sustain company operations. In an effort to appeal to a younger demographic, Harold's introduced new apparel lines; however, this strategy estranged many of its longstanding clientele. The impact of hurricanes in 2005 severely affected stores in three southern states, contributing to significant financial setbacks. The company reported losses of $6 million in 2005 and $11 million in 2006, the latter year marking the delisting of Harold’s stock from the American Stock Exchange.

On November 10, 2008, Harold's Stores along with six affiliated companies filed for bankruptcy liquidation, citing "intensified competition and an unfavorable economy" as reasons for ceasing operations. The previous month, consultants were engaged to explore potential alternatives; however, only merchandise liquidators expressed interest, leading to the selection of Gordon Brothers. The decision to close surprised some observers since Chapter 11 filings typically aim for financial reorganization, and the company had secured a $1.8 billion loan just prior to filing. Ultimately, the bankruptcy case was converted from Chapter 11 to Chapter 7 in March 2009. Prior to bankruptcy proceedings, Harold’s operated 43 stores across 19 states with a workforce of 624 employees, approximately half employed part-time. The company’s assets and liabilities were estimated between $10 million and $50 million. Investors Lester and de Waal incurred losses estimated at no less than $15 million and $23.5 million respectively.

File:Campus corner.jpg

Sidewalk outside former flagship Harold's store in Norman, Oklahoma, pictured in 2009

Aftermath

Two years before assuming office as mayor of Knoxville, Tennessee, Bill Haslam of Saks Fifth Avenue was appointed non-executive chairman of Harold’s in September 2001—a position he maintained through the company’s bankruptcy in 2008. In August 2009, the bankruptcy trustee initiated legal action against Haslam along with other directors and officers of Harold’s. The suit alleged that nearly $6 million in dividends had been improperly paid to preferred shareholders while the company was insolvent, and claimed that loans extended by Lester and de Waal were made in bad faith without exploring alternative solutions. These allegations were denied by Harold’s leadership; eventually both parties reached an out-of-court settlement for $2 million in February 2014. Haslam stated he was not unduly influenced by de Waal and emphasized he never held an operational role within the company—a position supported by Casey.

Powell had divested most of his shares prior to the bankruptcy. A large antique carousel horse he acquired—once serving as a long-standing logo and mascot for Harold’s—remained at Casey’s vacation residence in Texas as of September 2014. Additionally, Cafe Plaid, a restaurant Powell established in 1996 adjacent to the flagship store in Norman, continued operations under different ownership at that time. In October 2010, the former flagship location within Norman’s Campus Corner district was repurposed as an IT technology store managed by the University of Oklahoma’s Information Technology department; this space also accommodated meeting areas. Powell passed away at age 92 in June 2016 due to complications related to lung cancer.

External links

• Encyclopedia of Oklahoma History and Culture – Harold's (archived)