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Judge Forbids Broadway's Quitting-Business Signs

Retail: Although it's slated to close, the Orange store is ordered not to advertise a liquidation sale.

January 19, 1996|LESLIE EARNEST | SPECIAL TO THE TIMES

ORANGE — A Broadway store slated for closure in the Mall of Orange can continue its going-out-of-business sale as long as the store uses a less ominous label for it, a Superior Court judge ruled Thursday.

Judge Michael Brenner said a run-of-the-mill sale or "sale of the century" would be fine at the Broadway, but a liquidation or going-out-of-business sale is out, according to Harry Newman Jr., general partner of Orange Mall Development Assn., which owns the mall.

Newman said he objects to promotions of liquidation sales, especially at an anchor store, because they are unnerving both to customers and other merchants.

"We don't want to frighten all the tenants that [Broadway] is going out of business [and] that it could be dark, just an empty, dark space," said Newman, who is also chairman of Newman Property, which manages and leases the mall.

Cincinnati-based Federated, which bought the ailing 82-store Broadway chain in October, announced the following month that it would close several of the stores, including the Mall of Orange site.

Shortly after Christmas, a large banner was draped at that store heralding the going-out-of-business sale.

The mall's operators filed the lawsuit in Superior Court in Santa Ana earlier this month against the Broadway and Federated to halt its going-out-of-business sale promotion. The suit also sought to block the department store's closure.

On the sale issue, Judge Brenner sided with the mall owners, who maintained that an agreement between the department store and mall prohibits liquidation sales, Newman said.

The store had taken down its going-out-of-business-sale signs after the lawsuit was filed, Newman said.

With the sale issue apparently resolved, Newman said he will now consider whether to pursue the larger issue involving the store's closure. No additional court hearings have been scheduled, he said.

Newman said he believes the department store, under the terms of its lease, is bound to stay another five years, but Federated disagrees.

The Mall of Orange store is the only Broadway slated for closure in Orange County. Federated said it will convert the Broadways at Laguna Hills Mall, Brea Mall and Crystal Court in Costa Mesa into Macy's. The Broadway at Fashion Island Newport Beach will become Orange County's first Bloomingdale's. Federated is also the parent company of Macy's and Bloomingdale's.

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