Caldor
 | |
| Industry | Retail |
|---|---|
| Fate | Bankruptcy |
| Founded | 1951 (Port Chester, New York) |
| Defunct | 1999 |
| Headquarters | Norwalk, Connecticut, U.S. |
| Products | Clothing, photography, garden/seasonal, sporting goods, appliances, hardware, footwear, bedding, furniture, jewelry, beauty products, electronics, housewares |
Caldor was a chain of American discount department stores headquartered in Norwalk, Connecticut, operating throughout the northeastern United States. At one time, the company was a subsidiary of May Department Stores; Caldor was among the country's largest discount retailers.
Despite being a popular destination for shoppers, Caldor faced mounting losses during its final years. The chain declared bankruptcy in 1995 and never fully emerged from it, eventually resorting to closing its remaining stores on May 15, 1999.
History
Beginning
The first store was opened by Carl and Dorothy Bennett in a tiny second-floor loft in Port Chester, NY in 1951, as a five and dime. (from May 23, 1984 New York Times Business Day) Caldor was formed from the couple's first names: Carl and Dorothy. The Bennetts also developed a private clothing label, Marc Robbins, named for their two children. By the 1980s, Caldor had stores along the East Coast from Virginia to New Hampshire. In late 1998, Caldor had 145 stores. Many Caldor stores had been part of the J.M. Fields chain.
The Bennetts sold Caldor to Associated Dry Goods Corporation (ADG) in 1981. ADG would merge with May Department Stores in 1986. May sold the chain in November 1990 in a leveraged buyout. In 1991, Caldor went public and earned over $2.5 billion in revenue that year, becoming the fourth largest retailer in the United States behind Kmart, Target, and Wal-Mart. In 1992 it changed its format, as it expanded and renovated many of their older stores. By 1994, Caldor had 166 stores in 10 states.
Stern disagreement
Most Caldor stores had a bookselling department, and the stores would often post the New York Times Best Seller list to inform its shoppers. The posting of the list led to a spat with the newspaper in 1993. That year, Howard Stern released his controversial autobiography Private Parts. Caldor wanted nothing to do with the book and opted not to carry it in its stores. In fact, Caldor would not even acknowledge the book's place on the list once it reached the top spot, deleting the book from the list, and moving every other book on the list up one place. The New York Times told Caldor that in order to post the list, all of the books on it had to be acknowledged. Caldor responded by not posting the list the next week.[1]
First bankruptcy
In 1995, Caldor filed for Chapter 11 bankruptcy protection.[2] The chain found itself unable to compete with the lower prices and wider selection of such stores as Wal-Mart (which had acquired several former Caldor stores), causing a dramatic loss in sales.
Caldor also had trouble meeting its financial goals and losses mounted. Shortly before filing for bankruptcy, Caldor had $1.2 billion in assets and $883 million in liabilities, the lowest amount of assets and the highest amount of liabilities the company had since it was sold by May Department Stores in 1990. After the bankruptcy, Caldor closed 10 underperforming stores in 1996.
Printing error
Caldor relied heavily on a weekly multi-color sales flier to generate business. Fliers were distributed weekly to advertise sales that ran from Sunday through Saturday. In November 1998, the company suffered a huge public relations embarrassment when its sales flier featured a prominent photograph of two grinning boys playing the board game "Scrabble" with the word RAPE spelled out in the center of the board. Eleven million copies of the flier were distributed to the public via an 85-newspaper distribution chain. Caldor released a statement expressing its mystification over how the image was created and got past proofreaders.[3][4]
Second bankruptcy and liquidation
In January 1998, Caldor had $1.2 billion in liabilities and $949 million in assets, one of the worst deficits the company ever had. A few months later, Caldor closed 12 underperfoming stores, most in the Washington, D.C. area. This, along with the slow financial progress of the chain, caused its secured creditors to force the chain into Chapter 7 bankruptcy, which would have forced the liquidation of the entire chain. The creditors felt that their shareholders would benefit more from the liquidation of the company than if they allowed it to remain in business. In addition, Caldor's stock was delisted on the New York Stock Exchange.
Caldor responded by seeking mediation to resolve the dispute. However, it became clearer that Caldor's troubles could not be resolved by any means and that the demise of the chain was imminent. As 1999 began, Caldor announced that they would no longer be placing orders for or accepting shipments of new merchandise, which seemed to serve as a prelude to a liquidation announcement. That announcement came on January 22, where Caldor's chairman announced the chain had no alternative but to wind down business.[5]
Layoffs began immediately, with the staff at Caldor's corporate headquarters cut by a large margin. The liquidation sales began within several weeks of the announcement and the last Caldor store closed on Saturday, May 15, 1999. At the time the chain closed, it had 22,000 employees and 145 stores in nine East Coast states.
The chain made $2.5 billion in sales in its last full year in business.
Many Caldor stores eventually were purchased by retailers such as competitors Target and Wal-Mart. Many metro New York Caldor stores were bought by Kohl's after the company's closure as part of Kohl's entry into the New York retail market.
Popular Culture References
- Caldor was mentioned in a 2007 Family Guy episode, Boys Do Cry.
References
External links
- Article from findarticles.com about the last days of Caldor
- A capture of the last Caldor web advertisement, including a history of the company
- Caldor 1998 Annual Report on Form 10K