Reinterpreting the great US department store bankruptcies of the 1980s - a catalyst to strategic structural change
Reinterpreting the great US department store bankruptcies of the 1980s - a catalyst to strategic structural change
Purpose: the financial restructuring of the US department store industry is commonly interpreted as a time of corporate excess, value-destruction and ultimately collapse. The purpose of this paper is to re-analyse these events using qualitative methods to understand the background to the leveraged transactions and to review the implications that their failure had for the longer term strategy and structure of the US department store industry.
Design/methodology/approach: the research is based on two extensive periods of fieldwork in the US when the author interviewed (n=28) many of the protagonists of the 1980s restructuring period and those who inherited the management of the bankrupt businesses in the 1990s. By adopting a qualitative perspective, we are accessing social and human perspectives of these developments as well as their wider effects.
Findings: the leveraged transactions were conceptually an appropriate attempt to centralise the structure of the industry but their execution was not possible under such extreme financial distress. However, bankruptcy protection provided the environmental conditions to realise the benefits of more efficient strategic and subsequent wide-ranging structural change.
Originality/value: this research differs from economistic readings of the period that analyse changes in market value of the constituent firms and the more reactionary journalistic accounts. The paper re-casts the failed financial restructuring in a new light, underlining the regenerative effects of Chapter 11 Bankruptcy Protection in promoting firm revival, alongside visionary leadership
404-423
Wood, Steve
c21cde08-332e-4002-93e2-aad09a7f4ea9
2008
Wood, Steve
c21cde08-332e-4002-93e2-aad09a7f4ea9
Wood, Steve
(2008)
Reinterpreting the great US department store bankruptcies of the 1980s - a catalyst to strategic structural change.
Journal of Management History, 14 (4), .
(doi:10.1108/17511340810893135).
Abstract
Purpose: the financial restructuring of the US department store industry is commonly interpreted as a time of corporate excess, value-destruction and ultimately collapse. The purpose of this paper is to re-analyse these events using qualitative methods to understand the background to the leveraged transactions and to review the implications that their failure had for the longer term strategy and structure of the US department store industry.
Design/methodology/approach: the research is based on two extensive periods of fieldwork in the US when the author interviewed (n=28) many of the protagonists of the 1980s restructuring period and those who inherited the management of the bankrupt businesses in the 1990s. By adopting a qualitative perspective, we are accessing social and human perspectives of these developments as well as their wider effects.
Findings: the leveraged transactions were conceptually an appropriate attempt to centralise the structure of the industry but their execution was not possible under such extreme financial distress. However, bankruptcy protection provided the environmental conditions to realise the benefits of more efficient strategic and subsequent wide-ranging structural change.
Originality/value: this research differs from economistic readings of the period that analyse changes in market value of the constituent firms and the more reactionary journalistic accounts. The paper re-casts the failed financial restructuring in a new light, underlining the regenerative effects of Chapter 11 Bankruptcy Protection in promoting firm revival, alongside visionary leadership
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Published date: 2008
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Local EPrints ID: 178227
URI: http://eprints.soton.ac.uk/id/eprint/178227
ISSN: 1751-1348
PURE UUID: 9b8eeb57-7604-4f3b-871c-34d5141b4a64
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Date deposited: 24 Mar 2011 09:08
Last modified: 14 Mar 2024 02:45
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Author:
Steve Wood
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