Campeau’s ’89 Loss Balloons to $1.7 Billion

TORONTO —  Financially distressed Campeau Corp. lost $1.7 billion last year, a huge deterioration from 1988’s deficit of $34 million, the Canadian company reported Wednesday.

A large portion of the firm’s loss--$958 million--resulted from writing down the goodwill of one of Toronto-based Campeau’s U.S. retail divisions, Federated Department Stores Inc.

Federated and Allied--whose stores include Bloomingdale’s, Abraham & Straus and Jordan Marsh--have been under Chapter 11 bankruptcy protection in the United States since January. The companies have a combined debt load of $7.7 billion, most of which was incurred when financier Robert Campeau took them over using high-interest junk bonds.

With their heavy interest payments suspended under Chapter 11, pressure on the Cincinnati-based units has eased and they reported stronger than expected first-quarter results Tuesday. Pretax losses were lower than last year on flat year-to-year sales in the quarter ended May 5.

Last year’s revenue gain for Campeau mainly was because of a contribution of a full year’s results from Federated and Ralphs Grocery Co., bought in May, 1988.