Wanamaker's employs 7,000 to 8,000 people at its 16 city and suburban stores, and is one of the city's largest employers, with 3,000 employees in Philadelphia.
With sales of $450 million in fiscal 1985, Wanamaker's has remained one of the Big Four retailers in the Philadelphia area. The others are Bamberger's - the region's sales leader - Strawbridge & Clothier, and Gimbels. Local Gimbels stores were sold recently to Allied Department Stores for conversion to its Stern's chain.
However, despite a 45 percent increase in sales between fiscal 1982 and 1985, which Carter Hawley cited in today's announcement, Wanamaker's has been a disappointing performer for its parent company ever since it was acquired
from the Rodman Wanamaker Trust in 1978 for $60 million.
Since 1978, Carter Hawley has tried a variety of strategies to boost sales and profits as it watched Bamberger's and Strawbridge & Clothier eat into its market share.
Under the guidance of former chairman Richard Hauser, the company tried a series of expensive but dramatic theme promotions, bringing in merchandise
from Japan and then Italy, and running thematic events in stores. The costly promotions came to an abrupt halt with the cancellation of a Scandinavian promotion originally scheduled for spring 1985.
Hauser also launched the center city store's Automated Markdown Center, modeled on the highly successful Boston Filene's Basement, in a bid to keep inventories fresh and attract younger shoppers.
Under Hauser's successor, Boje, the company has added higher-margin private label merchandise, adjusted its merchandise to appeal to younger customers, and tried to distinguish itself from its competitors with goods that are available exclusively at Wanamaker's.
Boje also introduced an incentive plan that rewards employees who improve on their individual previous year's performance.
He has tried to hold the line on profit-eating promotions, long cited by Philadelphia retailers as a consistent drag on profits. "This is a horrendously promotional city," Boje said. "We've been able to hold the line or decrease promotional activity, but our competitors seem to keep increasing."
Philip M. Hawley, Carter Hawley's chairman and chief executive officer, said that despite Wanamaker's prospects for continued financial improvement, the parent firm is considering the sale because of its corporate commitment to strengthening its balance sheet and devoting corporate resources to modernization and growth in its other retailing operations.
"Carter Hawley is very debt-heavy and committed to a significant improvement in profits. Wanamaker's has remained a drag on its operations," said Monroe Greenstein who follows the retailing industry for Bear Stearns investment banking house in New York.
Carter Hawley is likely to come under increasing pressure to improve operations from General Cinema - the "white knight" company that helped thwart a 1984 hostile takeover bid by Leslie Wexner of The Limited. Carter Hawley sold $300 million in preferred stock to General Cinema, and that company gradually increased its holdings to about 37 percent of Carter Hawley stock.
Industry sources say a secret agreement under which General Cinema agreed not to interfere with Carter Hawley operations for a fixed period of time will expire shortly. General Cinema is likely to press for a bigger return on its investment. If Carter Hawley cannot improve its performance, General Cinema could try to force a sale of the company.
Carter Hawley operates 129 department stores, including the Broadway, Emporium Capwell, Thalhimers and Weinstock's. The company also operates 174 specialty stores in its Bergdorf Goodman, Contempo Casuals and Neiman-Marcus chains.