Bloomingdale's bankrupt? The idea was unthinkable. This was the store where a hyperventilating Burt Reynolds collapsed in the furniture department (Starting Over), where Splash mermaid Daryl Hannah took a crash course in pop culture, where defecting Russian musician Robin Williams was protected by a security guard (Moscow on the Hudson). This was the store that once tossed parties so high powered that the likes of Jacqueline Onassis would attend. This was the store—let's get serious—whose landmark 1980 promotion heralded the opening of trade with Red China.
But though the flagship Manhattan store and its 16 branches in 10 states remained profitable, its Canadian parent company, the real estate-oriented Campeau Corporation, could not meet the $7.5 billion debt it incurred when it purchased Bloomingdale's and the eight other Federated and Allied retailing chains in the late '80s. Bloomingdale's, which was put up for sale in September after Campeau disclosed it had cash-flow problems, was just one of the latest victims of late-'80s haute debt.
Don't look at Traub, though, for signs of mourning. "Clearly it's not fun and games," he says, "but I have to set an example." His mission is to maintain the aura that designer Donna Karan, who installed her DKNY line at Bloomingdale's last year, describes as "a fabulous playground. You graduate from FAO Schwarz to Bloomingdale's."
Traub, who has been shopping a deal to buy the store himself, plans to keep it that way. Though his voice is hoarse from dispelling employees' fears, he otherwise appears robust. "Marvin's strength has amazed our whole family," says Lee, his wife of 41 years. "The only way our home life has changed is that he's on the telephone all the time." The night before the bankruptcy petition was filed, the Traubs attended the 50th-anniversary performance of the American Ballet Theatre. Traub arranged to take a conference call with other Federated execs in the Metropolitan Opera House office. "Fortunately," says Lee, "it happened during intermission."
Not everything fits so tidily into Traub's schedule. Lately he has been spending more time reassuring shoppers and shippers than running his store. In the weeks before the Campeau filing, many merchants, fed up with late payments, were refusing to send goods to Blooming-dale's. Displays became more cut-rate than cutting-edge. "This is the most embarrassing thing that's ever happened to Traub," says retail consultant Alan Mill-stein. "He was practically turned into a panhandler going around Seventh Avenue begging for merchandise."
Known for cultivating personal relationships with manufacturers, Traub is now calling in his chips. "With Marvin there, I've always been able to count on Bloomingdale's," says designer Elie Tahari. "He can count on me. Our bank instructed us not to ship to Bloomingdale's. I shipped anyway."
Spirits among the store's sales force also remain high. "Traditionally, business drops down this time of the year," argues men's clothing salesman Jose Franco. "There's a lot of positive feeling towards Marvin Traub in this store." The feeling should be mutual: Traub, a Harvard graduate, started walking those well-trod tiles in 1950. He is credited with almost single-handedly engineering Bloomie's rise to such trendiness that New York's Learning Annex once offered a course on how to pick up dates at Bloomingdale's.
But for all Traub's energy and instincts, some observers say Bloomingdale's had begun to lose its cachet before it became bloated by Campeau's debt. In the late '80s, its faithful single shoppers started moving on to newer, hipper boutiques. Other customers bolted to convenient specialty stores like the Limited and the Gap, while couch potatoes settled in with mail-order catalogs.
Such defections aren't unique to Bloomingdale's—or the other Campeau stores, including Jordan Marsh and Abraham & Straus. The retailing world was diminished by the closing of B. Altman's in December. Bon wit Teller has been in Chapter 11 since August. As a defensive measure to ward off a takeover bid, B.A.T. Industries has put the solid Saks Fifth Avenue and Marshall Field's on the block, and Macy's, though still a leader in the field, is deep in debt because of expansion and their own leveraged buyout in 1986. Some analysts are even predicting the death of the department store.
Traub, however, vigorously denies the bloom is off Bloomie's. "Department stores that succeed are those that have a special image," he says. "We have that." Even under Chapter 11, Traub plans to forge ahead with his trademark special events. This spring, the store will salute Virginia crafts and launch Ralph Lauren's Safari fragrance. Next fall's promotion—the annual blockbuster—will be Spain. "I think it's one of the fastest-growing countries in Europe," says Traub.
Within the bleached-wood comfort of his seventh-floor office in the 59th Street flagship store—just beyond the bath towels—there is an enormous statue of Hanuman, the Hindu monkey-chief god who was blessed with longevity, supernatural strength and the ability to fly through the air. Facing this figure—a remnant of a storewide India promotion—from his chrome-based desk every day, Traub seems to have absorbed its longevity and at least some of its strength. Now he's only hoping for a safe landing.
—Elizabeth Sporkin, Veronica Burns in New York City
- Veronica Burns.
It should have been just another tuxedoed junction in the glittering social calendar of an indefatigable CEO. One recent evening, Bloomingdale's department store chairman, Marvin Traub, in Polo black tie, and his wife, Lee, wearing Oscar de la Renta, lifted forkfuls of foie gras at Manhattan's Museum of Modern Art, where they were celebrating a Picasso-Braque exhibition. But this night, Traub, 64, attracted more stares than the Cubist canvases. Only hours before, Bloomingdale's, for nearly two decades the country's style-setting mecca, had begun a new chapter in its 118-year history: Chapter 11.