Campeau Corp. Ousts Founder From 2 Posts

Robert Campeau, the flamboyant Canadian retailer whose empire foundered under the weight of debt, has been ousted as chairman and chief executive of his own company.

Campeau Corp.’s board made the announcement in a terse statement from its Toronto headquarters. Campeau remains a director of the company he founded more than 40 years ago, but his future remains unclear.

Campeau, 66, went on a multibillion-dollar spending spree for American department stores in the 1980s using borrowed money, expanding his holdings to well-known names ranging from Jordan Marsh to Bloomingdale’s.

But his U.S. retailing operations staggered under the weight of this debt and sought Chapter 11 bankruptcy protection last January. He has faced further pressure because of additional debts, which include millions of dollars in personal loans, and the declining value of the stock in his own company.

Rumors had circulated recently that Campeau was in danger of losing his position as chairman and was in fact under pressure to resign.

Campeau’s board appointed James D. Raymond, a director of the National Bank of Canada, and Gary M. Goodman, a top executive with Olympia & York Developments Ltd. of Toronto, to the office of chief executive on an interim basis.

The board also named Robert Despres, a Canadian investor who has been on Campeau’s board since 1975, as interim chairman.

The company’s statement said it had begun a search for a permanent chairman and chief executive.

Campeau Corp. spokesman Richard W. Wertheim declined to comment on what changes the board planned for the future of the company. He said while Campeau would remain on the board, “other roles he may have in the future I can’t say.”

The changes are effective immediately, he said. The Campeau board met in Toronto in a special session following its first meeting July 30.

Raymond, 65, was appointed to Campeau’s board Aug. 1. He is a former president of Claridge Inc., an investment firm connected with the powerful Bronfman business family in Canada.

Goodman was elected to the board on July 30. He is a senior vice president of corporate development of Olympia & York in Toronto.

Despres has been on Campeau’s board since November, 1975. He is president of DRM Holdings Inc., a Canadian investment firm.

Campeau’s department store divisions, Federated Department Stores Inc. and Allied Stores Corp., had a combined debt of $7.7 billion when they sought protection from creditors seven months ago.

Much of the debt was in high-interest junk bonds to finance the purchases by Robert Campeau, who bought Allied in 1986 and Federated in 1988.