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Research & Statistics

By Michael Baker and Bindu Nair

Retail Scorecard ’88: Where are they now?

It’s January 1988. Canadian financier Robert Campeau had acquired Allied Stores two years earlier and begun selling off many of its chains, including Ann Taylor, Jordan Marsh, Filene’s and Brooks Bros. In July, he would complete a hostile takeover of Federated Department Stores.

To track the dizzying acquisition and divestiture sprees of Campeau and others like him, and to keep tabs on the myriad chains owned by the then-dominant mall retailers (Edison Bros., Melville Corp., U.S. Shoe, et al), Shopping Centers Today printed the first edition of what was to become its annual “Retail Ownership Scorecard.”

There were a total of 46 retail companies listed in that first Scorecard, along with the chains they owned and the number of stores in each. This year, SCT decided to take a look back at the ’88 list and see how those founding members of the Scorecard had fared in the intervening years. How many still existed at all? How many had survived, but without their original retail holdings (or without any retail holdings at all)? How many companies — though perhaps strong in their heyday — had lost their way among the innumerable reefs that have dotted the retail marinescape during the past decade or so — excessive debtloads, rapidly changing consumer tastes, recession and new retail formats?

One place to start such a postmortem, of course, is with Campeau Corp. itself. It paid $8.17 billion — 97% of it financed by debt, much of that junk-grade — for Federated Department Stores, a company with a pre-takeover market value of $2.93 billion. In time for the 1990 Scorecard, Federated was in Chapter 11 bankruptcy proceedings and Robert Campeau was out of a job.

Federated, fortunately for landlords, reemerged as an independent public company in early 1992 and now owns more than 400 department stores under eight names. Other chains in Campeau’s group, including Ann Taylor and Brooks Bros., also went on to thrive. That is true of a large number of the chains owned by now-defunct companies in the ’88 Scorecard: Through sale to stronger companies or reemergence as independent entities, they avoided the fate of their original parent companies.

However, some retail conglomerates on the original Scorecard list, including Edison Bros., Hooker Retail and Petrie Stores, went bust and left little to remember them by. Others (e.g., Carter Hawley Hale, Carson Pirie Scott, Mercantile) quietly faded away through acquisition by other retailers. Some continued on to be strong companies to this day (Wal-Mart, Gap, Target Corp.), evolving through an adaptive process of acquisition, divestiture and new formats.

Names like Carson Pirie Scott, Carter Hawley Hale, Petrie Stores and U.S. Shoe may not ring a particularly loud bell to many U.S. consumers, particularly younger ones. Some of them still have a degree of resonance to an older generation of shoppers. In 1988, they were among the chains that dominated the retail scene. Now, if there were a retail Jurassic Park, these are some of the companies you would find in it. Changing consumer tastes and relentlessly intensifying competition during the past 10 years have spelled certain doom to any retail company unable to evolve quickly in the face of altered circumstances.

A handful of companies evolved by divesting themselves of all retail holdings. Crown American Corp. —now a mall real estate investment trust — had been in the department store business in 1988 (Hess’s). Crown got out of it during the retail slump of the early 1990s. Taubman Investment Co., which owned the Woodward & Lothrop and John Wanamaker chains in 1988, sold both of them to the May Department Stores Co. in 1995, thus removing itself from the retail store ownership business as well. And Interco, which included 820 Florsheim stores among its retail holdings in 1988, now focuses exclusively on manufacturing residential furniture under the name Furniture Brands International.

Sixteen companies listed in the ’88 Scorecard have persisted to the present day, although some have had near scrapes with bankruptcy along the way. Tribute to the staying power, adaptability and popularity of general merchandise companies, all but four of the 16 surviving companies are either in the discount or full-price department store business: Ames, Dillard’s, Dollar General, Family Dollar, Federated, JC Penney, Kmart, May, Montgomery Ward, Sears, Target and Wal-Mart. Two others — Jacobson and Nordstrom — are in similar businesses.

The companies on the ’88 Scorecard with the largest number of retail chains were Melville Corp., Federated Department Stores and The May Department Stores Co. The accompanying table shows how they compare now with their situation 12 years ago. Melville Corp., with the most extensive retail empire in 1988, boasting 17 chains, is now called CVS, which, in fact is its only remaining trading name. Federated Department Stores and The May Department Stores Co. are also substantially reduced in terms of store counts, although they still own an impressive number of chains.

It isn’t possible from the Retail Ownership Scorecard to quantify with any exactitude the changes that have taken place in retail ownership over the past 12 years, for the simple reason that the Scorecard was always a selective, rather than an all-inclusive, list of retail chains. However, the changes that are identifiable in the Scorecard are at least indicative of the far-reaching industry restructuring that has taken place over the past decade.

Then and Now: The Three Companies in the 1988 Scorecard with the Most Chains

CVS (formerly Melville Corp.)
Total Stores 1988: 6,174
Subsidiaries 1988
Accessory Lady, B-Club, Chess King, CVS,
Freddy’s, Free-Fall, Kay-Bee, Linen ‘n Things,
Marshall’s, Meldisco (leased in Kmart), Open Country,
Prints Plus, Prism, Fan Club, This End Up,
Thom McAnn, Wilson’s House of Suede
Total Stores 2000: 4,078
Subsidiaries 2000
CVS, CVS ProCare

Federated Department Stores
Total Stores 1988: 653
Subsidiaries 1988
Abraham & Straus, Bloomingdale’s, Bullock’s,
Bullock’s Wilshire, Burdines, The Children’s Place,
Filene’s, Filene’s Basement, Foley’s, Gold Circle/Richway,
Goldsmith’s, Lazarus, I. Magnin, MainStreet, Ralph’s Grocery, Rich’s
Total Stores 2000: 403
Subsidiaries 2000
Macy’s, Rich’s, Lazarus, Goldsmith’s,
Bloomingdale’s, Burdines,The Bon Marche, Stern’s

The May Department Stores Co.
Total Stores 1988: 2,847
L.S. Ayres & Co., Caldor, Famous-Barr, G. Fox, Goldwater’s,
Hahne’s, Hecht’s, Kaufmann’s, Loehmann’s, May Co. California,
May Co. Cleveland, May D&F, May Florida, Meier & Frank,
O’Neil’s, Robinson’s, Sibley’s, Venture, Payless
Total Stores 2000: 408
Subsidiaries 2000
Lord & Taylor, Hecht’s, Strawbridge’s, Foley’s,
Robinsons-May, Filene’s, Famous-Barr, L.S. Ayres,
The Jones Store, Meier & Frank, ZCMI

Here’s how the numbers break out:

• Twenty-two of the 46 companies no longer do business or no longer do so under the same name, having either succumbed to bankruptcy or been absorbed into other retail operations. In a few cases, some have consolidated their holdings under different names. These 22 now-demised companies owned 20,595 stores in 1988.
• Six of the 46 still exist as corporate entities but no longer have any retail holdings
• Sixteen of the 46 have survived as retail companies and, to a greater or lesser extent, thrived