Magazine article Editor & Publisher

145 Stores Closing Doors, Denting East Coast Papers

Magazine article Editor & Publisher

145 Stores Closing Doors, Denting East Coast Papers

Article excerpt

Retailer Caldor bankrupt despite annual sales of $2.5 billion

The announced closing of bankrupt Caldor, a Northeast retail powerhouse with annual sales of $2.5 billion at 145 stores in nine states, is bad news for the region's newspapers.

"It will hurt us in terms of revenue," says The Boston Globe's local retail advertising manager Thomas Folan, who says Caldor spent $1.2 million with the Globe in 1998, mostly for preprints.

"There will be a significant loss in revenue," says Howard Griffin, vice president of advertising for the Journal Register Co., which publishes the New Haven (Conn.) Register. "They ran preprints almost every week."

Though the stores won't close until mid-May, the company has recently changed its advertising, with less expensive in-paper (ROP) ads replacing the pre-prints. That has happened at the Register and The Record in Bergen County, N.J. "They stopped preprints. Our guess is it's an investment they can't afford," says Lou Stancampiano, display advertising manager at the Record. "It's typical of companies that go out of business. It becomes an ROP pattern that increases the percent of discount over a period of time until the stores are liquidated."

A Caldor spokesman declines to provide the size of the company's ad budget. "I don't have information on that, nor do I have access to that information," says the spokesman, who adds no one at Caldor would make that information public.

Liquidation is expected to begin in February, after an auction determines which liquidation company will get the job, according to Peter Chapman, president of Bankruptcy Creditor Services, a Princeton, N.J., firm that has been following the action closely.

The liquidation company will become the final Caldor advertiser, after it buys all of Caldor's merchandise. "Look for something less than a full page once a week," Stancampiano says, "not substantial and not the equivalent of the preprint revenue. From here on in we start losing revenue on a weekly basis until it's all gone."

The situation is bad, but not unexpected, since Caldor filed for bankruptcy in 1995 and has been heading for closure. "They were winding down in Philly over the last couple of years, so the hit to us was less than half a million," says Todd Brownrout, vice president of sales and marketing at The Philadelphia Inquirer and The Philadelphia Daily News. …

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