Bon's Parent Firm Seeks Relief In Bankruptcy Court

Campeau Corp., parent company to The Bon Marche, filed for Chapter 11 bankruptcy protection today. The filing leaves unanswered the question of what will happen to The Bon, the largest retail chain in the Northwest with 43 stores and 4,500 employees in Washington, Oregon, Idaho, Montana, Utah and Wyoming.

The Bon is the third-largest division of Allied Stores Corp. Toronto-based Campeau Corp. owns Allied and Federated Department Stores, which operate 260 departments stores in the United States, including Bloomingdale's.

It is the biggest Chapter 11 filing in American retailing history, but customers are not likely to notice any immediate changes at The Bon as a result of the Chapter 11 filing.

Campeau said stores will remain open, and it expects all normal customer services and store policies - credit-card purchasing, billing adjustments, merchandise returns and service contracts - to continue.

Some retail analysts have speculated that the stores might actually be in better shape as a result of the Chapter 11 filing. Suppliers that have cut off shipments have said they would resume sending merchandise if assured by a bankruptcy court of prompt payment.

A Chapter 11 filing allows a company to reorganize its business while temporarily relieving it from paying debts, including interest payments to banks, junk-bond holders and securities firms that helped finance its acquisitions.

Campeau's retail stores themselves, some say, might be able to prosper if the company reduces its debt by issuing stock to its creditors.

The Bon, founded in Seattle by a French immigrant nearly 100 years ago, is considered among the jewels in the Campeau retailing empire.

Campeau's core retail businesses, including The Bon, remain fairly strong. Its financial problems are a result of some $8 billion in debt, much of it accumulated when Campeau acquired Allied and Federated in the mid-1980s. The Bon itself is considered to be in relatively healthy financial shape, reporting an estimated 9 percent revenue increase in 1989.

A Chapter 11 filing allows companies to continue operating while a trustee works out a debt-repayment plan satisfactory to creditors.

``The Bon is worth a lot more as a going concern than as real estate,'' said Neil Thall, a principal with Kurt Salmon Associates, an Atlanta-based retail consulting firm. ``All in all, it wouldn't make any sense to shut the doors.''

But a Chapter 11 filing does increase the chance that The Bon will be sold, and that would have major effects on other Seattle-area retailers, on downtown and on suburban shopping malls. May Department Stores, of St. Louis, Dillard Department Stores, of Little Rock, Ark., R.H. Macy of New York, and Asian concerns all have been suggested as possible buyers.

But Thall says that May and Dillard are more likely to be interested in Allied and Federated divisions closer to their headquarters, such as Burdine's and Rich's.

May owns Meier & Frank in Portland and the May Co. in California, along with retailers in the Midwest and Southwest. Dillard stores are located through the Midwest, South and Southwest.

Thall says Macy's is an unlikely candidate, since it is burdened with heavy debt from a leveraged buyout several years ago.

``A logical buyer for The Bon would be someone from the Far East,'' Thall said.

The Campeau Chapter 11 filing also affects the fate of three Washington shopping malls - Northgate, Tacoma Mall and the Columbia Shopping Center in Kennewick.

Among the big losers are Bon employees who converted pension-fund investments to Campeau stock.

Campeau closed 1986 trading at $7 (Canadian) per share after buying Allied in December of that year. The stock was trading today at $2.35 (Canadian).

For suppliers, news of the Chapter 11 filing is something of a relief. Despite being paid last Wednesday for merchandise shipped in December, suppliers since then have been debating what to do about the next shipments, which they would be sending to Allied and Federated divisions for the spring.

Apparel makers don't want to stop shipments to the stores, since Allied and Federated, together, have a considerable share of the department-store market. But they also do not want to ship goods for which they won't be paid.

The Bon's image today remains largely the same as it has been for decades: a big, traditional, moderately priced department store where brides sign up for china and later shop for good deals on housewares, linens and children's wear.

While The Bon has never sold the couture fashions carried by the city's three other major retailers - Nordstrom, Frederick & Nelson and I. Magnin - it has carved a name for itself in trendy fashions for young adults. It has been a trend-setter in setting up free-standing boutiques for apparel manufacturers who target teen-agers and young adults, such as Seattle-based Generra and Seattle Pacific Industries.

Campeau's bankruptcy filing will likely put on hold or eliminate plans that The Bon announced earlier this summer to open four stores in British Columbia in the 1990s.

What Campeau owns

Here is a list of the U.S. retailers owned by Campeau Corp. and the states in which their stores are located:

Allied Stores Corp.:

-- Jordan Marsh, 26 stores - Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island.

-- Maas Brothers-Jordan Marsh, 28 stores - Florida, Georgia.

-- Stern's, 24 stores - New Jersey, New York, Pennsylvania.

-- The Bon Marche, 43 stores - Idaho, Montana, Oregon, Utah, Washington, Wyoming.

Federated Department Stores Inc.:

-- Abraham & Straus, 15 stores - New Jersey, New York.

-- Bloomingdale's, 17 stores - Connecticut, Florida, Illinois, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Texas, Virginia.

-- Burdines, 30 stores - Florida.

-- Lazarus, 43 stores - Indiana, Kentucky, Michigan, Ohio, West Virginia.

-- Ralphs, 134 stores - California.

-- Rich's-Goldsmith's, 26 stores - Alabama, Georgia, South Carolina, Tennessee.

Associated Press