Questrom Is Surprise Choice to Head Ailing Campeau Units

Allen I. Questrom, the retailing executive credited with revitalizing such chains as Neiman Marcus and Bullock’s, on Friday was named chairman and chief executive of Campeau Corp.’s bankrupt department store divisions. To take the job, he was given a signing bonus of $2 million and was guaranteed pay of at least $2 million annually for five years.

The appointment, coming about two weeks after Questrom rejected a previous offer from Campeau, surprised the retailing industry and even some company insiders. But it was hailed as a coup in the effort to turn around Campeau’s big Federated Department Stores and Allied Stores units.

For Questrom, 49, who is quitting as president and chief executive of Neiman Marcus to join Federated and Allied, the move marks a triumphant return. He resigned as vice chairman of Federated in May, 1988, after Campeau acquired the company for $6.6 billion.

During his previous 23-year stint with Federated, Questrom also headed its Los Angeles-based Bullock’s chain and its Atlanta-based Rich’s department stores.

Industry observers called Questrom’s hiring a further indication that Campeau intends to keep most, if not all, of its nine Federated and Allied department store chains and nurse them back to financial health. Some analysts previously speculated that Campeau would have to sell assets to pare its $7.7 billion in debts, most of which stem from the company’s junk bond-financed takeovers of Allied and Federated.

So far, however, only the Bloomingdale’s chain has been put up for sale, and Campeau officials said this week that they are considering taking it off the block.

“Questrom is certainly a step in the right direction,” said Jerome Chazen, chairman of the giant apparel and fragrance firm Liz Claiborne Inc. “It shows that Federated (and Allied) still intend to remain a factor.”

Gilbert W. Harrison, chairman of the New York investment banking firm Financo, added: “It’s a great move. Questrom is an extremely talented merchant, and he knows the insides and outsides of Federated.”

Questrom left his office at Neiman Marcus headquarters in Dallas on Friday to go golfing and could not be reached for comment. He will begin his new job, which will be based in New York, on Monday. Questrom replaces John W. Burden III, who resigned as chairman and chief executive of Federated and Allied effective Wednesday.

With the addition of Questrom, Campeau’s U.S. retailing operations have rounded out their new senior management team with a much-needed merchandising expert. Questrom will report to G. William Miller, former Federal Reserve chairman and Treasury Secretary, who last month was named chairman of the retailing operations’ holding company, Federated Stores Inc.

Miller is expected to concentrate on the organization’s finances, while Questrom focuses on store operations and such matters as restoring employee morale and persuading apparel makers to resume full shipments.

The other retailing unit of Federated Stores, Compton-based Ralphs Grocery Co., will continue to be headed by its current chairman, Byron Allumbaugh. The Ralphs supermarket chain is considered financially sound and was not included in the Chapter 11 bankruptcy filing on Jan. 15 by Federated and Allied, the biggest bankruptcy case ever in U.S. retailing.

Questrom’s associates maintained that it took more than the $12-million compensation package to persuade him to change his mind and accept the chairmanship of Federated and Allied. His Neiman Marcus contract guaranteed him a minimum of $900,000 a year.

“For Allen, it’s a matter of coming home, which was attractive to him from the outset,” said company spokeswoman Carol Sanger. “I don’t know that it was as much salary as what he’ll be able to do. He’s an individualist and he likes to leave his footprints in the sand.”

Bernard Chaus, chairman of the big New York apparel firm bearing his name, suggested that Questrom “couldn’t resist the entrepreneurial challenge.”

“It’s a combination of ego and money and a great challenge,” Chaus said.

At Neiman Marcus, Questrom will be replaced by Terry J. Lundgren, who was promoted from executive vice president. Lundgren, 37, is a longtime associate of Questrom and has spent most of his retailing career based in Los Angeles.

Before following Questrom to Neiman Marcus in November, 1988, Lundgren was president of Bullocks Wilshire and a vice president with Bullock’s.