Carter Hawley Hale’s Shares Take 25% Drop

Carter Hawley Hale Stores’ stock headed back down Friday amid continuing indications that the company will file for Chapter 11 bankruptcy court protection within days.

The Los Angeles-based retailer’s stock was the second-biggest percentage loser on the New York Stock Exchange, posting a 25% drop. The shares were off 62.5 cents, closing at $1.875, near their all-time low.

Carter Hawley’s $350 million in junk bonds, which plunged early in the week, rose slightly on the exchange Friday. Its bonds maturing in 1996, which until this week paid 12.25% interest, rose $8.75 to close at $203.75 per $1,000 of face value.

The company’s bonds due in 2002, which had paid 12.5% interest, were up $3.75 to $173.75.

One analyst said the opposite movements of the stock and bonds in Friday’s trading reflected the status the securities would have in Chapter 11 bankruptcy proceedings. Creditors such as bondholders have a higher priority claim than holders of common stock do on the assets of a company reorganizing under Chapter 11.

The trade paper Women’s Wear Daily reported Friday that Carter Hawley, parent of the Broadway-Southern California and three other department store chains, has arranged more than $500 million in debtor-in-possession financing--post-Chapter 11 loans--with Chemical Bank. Representatives of Chemical Bank and Carter Hawley declined to comment.