clarinews@clarinet.com (02/03/90)
CINCINNATI (UPI) -- Allen I. Questrom Friday was named chairman and chief executive officer of Federated and Allied department stores, the operators of 10 prestigious chains now under Chapter 11 bankruptcy protection. Questrom, a veteran of the retail industry, resigned his position as president and chief executive officer of Neiman-Marcus Group Inc., which he joined in May 1988 after 23 years with Federated Department Stores Inc. The 49-year-old executive left Federated -- where he had risen through the ranks and headed two department store divisions -- at the time it was acquired by Toronto-based Campeau Corp. in a $6.6 billion transaction that relied heavily on debt. Campeau, a real estate developer, had purchased Allied Stores Corp. for $3.6 billion in 1986. Last fall, Allied and Federated found themselves in a cash-squeeze -- a result of the highly leveraged buyouts undertaken by Campeau -- that left them unable to meet their payments to bondholders or their obligations to banks and suppliers. Fearing vendors soon would stop making critical merchandise shipments, Federated and Allied filed for Chapter 11 bankrutpcy protection from creditors, listing debts of $7.5 billion, on Jan. 15. A day later, the company named former Federal Reserve Chairman G. William Miller to the post of chairman and chief executive officer of Federated Stores Inc., the U.S. holding company for Campeau's retail units. Analysts had expected Federated and Allied to seek an experienced retail executive to steer the company through its Chapter 11 reorganization process. The retail units are not expected to emerge from bankruptcy for one-to-three years. Questrom will be teamed with James M. Zimmerman, president and chief operating officer of Federated and Allied. The two previously served together as chairman and president of Federated's Rich's store division from 1980 to 1984. In a press statement, Miller said the pair lifted Rich's from a low sales and profit performer to the most profitable divison of Federated by 1984. ``The appointment of Allen Questrom to work in tandem with Jim Zimmerman establishes a premier retail partnership,'' he said. In addition to Rich's, the two retail units operate Bloomingdale's, Abraham & Straus, Burdines, Lazarus, Jordan Marsh, Goldsmith's, The Bon Marche, Mass Brothers and Stern's.