Campeau Ousted From Retailing Company
NEW YORK (AP) _ Robert Campeau, the flamboyant Canadian retailer whose empire foundered under the weight of debt, was ousted Friday as chairman and chief executive of his own company.
The Campeau Corp.’s board made the announcement in a terse statement from its Toronto headquarters. Campeau remains a director of the company but his future remains unclear.
Campeau is an entrepreneur who went on a multibillion-dollar spending spree for American department stores in the 1980s using borrowed money, expanding his holdings to well-known names ranging from Jordan Marsh to Bloomingdale’s.
But his U.S. retailing operations staggered under the weight of this debt and sought Chapter 11 bankruptcy protection last January. He has faced further pressure because of additional debts, which include millions of dollars in personal loans, and the declining value of the stock in his own company.
Rumors had circulated recently that Campeau was in danger of losing his position as chairman and was in fact under pressure to resign.
Campeau’s board appointed James D. Raymond, a director of the National Bank of Canada, and Gary M. Goodman, a top executive with Olympia & York Developments Ltd. of Toronto, to the office of chief executive on an interim basis.
The board also named Robert Despres, a Canadian investor who has been on Campeau’s board since 1975, as interim chairman of the company.
The company said in a statement from Toronto that it had begun a search for a permanent chairman and chief executive.
Campeau Corp. spokesman Richard W. Wertheim declined to comment on what changes the board planned for the future of the company. He said while Campeau would remain on the board, ″other roles he may have in the future I can’t say.″
The changes are effective immediately, he said. The Campeau board met in Toronto in a special session following its first meeting July 30.
Raymond, 65, was appointed to Campeau’s board Aug. 1. He is a former president of Claridge Inc., an investment firm connected with the powerful Bronfman business family in Canada.
Goodman was elected to the board on July 30. He is a senior vice president of corporate development of Olympia & York in Toronto.
Despres has been on Campeau’s board since November 1975. He is president of DRM Holdings Inc., a Canadian investment firm.
Campeau’s department store divisions, Federated Department Stores Inc. and Allied Stores Corp., had a combined debt of $7.7 billion when they sought protection from creditors six months ago.
Much of the debt was in high-interest junk bonds to finance the purchases by Robert Campeau, who bought Allied in 1986 and Federated in 1988.
He lost control of the retailing operations shortly after they filed for bankruptcy. They are now run as a separate operation headquartered in Cincinnati.
Campeau Corp. lost $80 million in the first quarter of 1990, on top of $1.7 billion in losses in 1989.
The National Bank of Canada in January seized about 80 million Canadian dollars in Campeau Corp. stock owned by Robert Campeau, after he missed payments on loans.
He had lost much of his personal fortune in a plunge in the company’s stock. But he failed to meet payments that would have allowed him to repurchase the shares and regain control of the company earlier this year.
Before the bank seized his stock, Campeau and his family held 53.9 percent. Olympia & York, a property development company, still holds 11.8 percent and the remainder is publicly held.