Reflections on the Broadway

From its humble beginnings in 1896, the Broadway grew from a single Los Angeles store serving a horse-and-buggy trade at 4th Street and Broadway to a brilliant and massive department store chain that reflected the seemingly boundless growth and prosperity of Southern California. By the late 1970s, it was the flagship of the nation’s sixth-largest retailing company, with a department- and specialty-store empire that spanned both coasts.

Then the merchants of Wall Street discovered gold in stores--or at least they thought they did. Takeover artists went on the prowl in the mid-1980s, stalking big retailing companies, often for the real estate value of store properties. When they looked West, there was Carter Hawley Hale Stores, owner of the Broadway, Neiman Marcus and Bergdorf Goodman. Twice in two years, Carter Hawley fended off the same unwanted suitor.

But the price of independence has been high. Laden with debt and stripped by a selloff of its premium specialty stores, Carter Hawley has become the latest big retail company to take cover under the protection of bankruptcy laws. It will continue operations during its reorganization and hopes to emerge stronger, tougher and ready for the 1990s.

Many of Carter Hawley’s problems mirror what’s gone wrong with U.S. retailing. Other big retail takeover targets--Federated Department Stores and Allied Stores--are now being reorganized under bankruptcy laws. Repaying junk bonds incurred either in a buyout or to remain independent has been tough because of the recession and lackluster sales in the competitive retail market.

Minding the store is tough even in normal times. Chasing increasingly fickle and mercurial shoppers is more difficult and costlier than ever. To make ends meet, Carter Hawley has sold off a number of divisions and management has taken heat for some stumbling along the way.

Economic adversity is roiling many sectors of American business right now. But out of all this economic adversity could emerge a Broadway full of the old fight.

Southern California would seem the lesser without the benefit of a happy ending.