In its last major reorganization before an expected exit from bankruptcy later this year, Carter Hawley Hale, parent of the Broadway Department Store, said Monday that it is consolidating the merchandising and administrative operations for its four department store chains into a single unit based in Los Angeles.
Separately, company officials confirmed plans to close up to 12 stores, including the Broadway outlets in Anaheim and Hawthorne, as well as three Carter Hawley Hale stores in Utah and one in Denver. The company is expected to officially release the sites of the stores to be shuttered when it files its bankruptcy reorganization plan, a date tentatively set for late April.
The consolidation announced Monday, to be completed over the next six months, eliminates the separate headquarter operations the company had maintained in San Francisco for its 34 Emporium and Weinstocks stores sprinkled largely throughout Northern and Central California.
About 400 workers in Northern California, all of whom are based in the historic Market Street building that is also home to the flagship Emporium store, will be affected by the consolidation. Although company officials said they were unsure how many workers will be laid off, one executive pegged the maximum number of layoffs at 300.
The latest move is the second consolidation CHH has made while under bankruptcy court protection. In January, the company merged its 12-store Broadway Southwest operations, based in Phoenix, into the Broadway division based in L.A., eliminating 240 jobs. Savings from both mergers are estimated at up to $30 million annually. Last spring, CHH started the series of mergers by consolidating its Weinstocks operations, then based in Sacramento, into the Emporium unit.
With the latest merger, a centralized CHH organization based in Los Angeles will operate 88 stores under four separate names--Broadway in Southern California; Broadway Southwest in Arizona, Nevada, Colorado and New Mexico; Emporium in the San Francisco Bay Area, and Weinstocks in the Central Valley.
Under the new organization, H. Michael Hecht, CHH president, is responsible for the company's merchandising operations, assuming duties once held by Barbara Bass, president and chief executive of the Emporium, and Robert Rieland, chairman and chief executive of the Broadway stores. Both Bass and Rieland are leaving the company.
Reporting to Hecht in the new merchandising operation will be Carol Greer, the former president and chief executive of Broadway Southwest, and William Podany, a former senior vice president at the Broadway. Greer will head merchandising for women's, children's and cosmetics departments, while Podany will oversee purchasing for the men's, boys' and home furnishings departments.
CHH officials said that although cutting costs is an important goal of the consolidation, improvements in the way merchandise is selected and purchased can be an even more significant result over the long term. For example, rather than having several groups of store buyers selecting merchandise for a smaller number of stores, a single group of buyers will be making the selections for the entire chain--giving CHH greater clout with its vendors and imposing a uniform face and style on all its department stores.
At the same time, critics note, regional and even local preferences of the customers of each store can get lost in the shuffle. "As a buyer, I don't think I could cover the whole state," one CHH employee said. "You really have to wonder if the markets for all these stores are really similar enough to pull this off."
Philip M. Hawley, chairman of CHH, said department and specialty store chains have been moving toward centralized buying for the last several years and have been able to accommodate regional and local preference variations by more careful tracking of inventory--a process made simpler in recent years by the introduction of sophisticated computer systems.