Hinshaw’s final sale brought out the crowds . . . : . . . that weren’t there a week ago. : Departed Stores : Hinshaw’s in Arcadia Is Latest Retailer to Be Squeezed Out

When Hinshaw’s opened its doors Friday, the Arcadia retailer promoted its bargains with placards that have become signs of the times for more and more privately owned department stores--”Going Out of Business Sale.”

Large crowds milled in the aisles hunting for bargains. Long lines stretched from the cash registers. And the store’s renowned service was slowed by the crush of shoppers, said Alvira Yates, a Hinshaw’s devotee who will miss the local landmark.

“Normally the service is very prompt, and it’s hard to find good service these days,” she said.

Faced with recession-related sales declines, pinched by banks’ tight credit policies and hammered by hard-charging competition from national department store chains and specialty shops, small community-based department stores have been failing in large numbers nationwide for more than a decade.

Indeed, even before the recession and the recent adoption of tight-fisted lending policies, privately held department stores were being squeezed by savvy upscale stores such as Nordstrom and discount operators such as Kmart and Wal-Mart, said Kurt Barnard, president of the New York-based Barnard’s Retail Consulting Group.

Barnard said. “The bigger you are, the more cost-effective you are--and the greater your ability to attract consumers with values. The small firms are simply being overwhelmed.”

For Hinshaw’s, an Arcadia landmark at Baldwin Avenue and Duarte Road, the end will come after 40 years in business. The store, which employs about 130 people, was founded in Arcadia in 1952 by Ben Clayton and initially managed by Ezra Hinshaw. Clayton left most of the company stock to a medical foundation in Texas when he died in the late 1970s. San Diego-based investors George Moore and Roland Colton purchased a controlling interest in 1991.

When Hinshaw’s closes permanently--a final shutdown could be several months away--it will be survived by the Santa Anita Fashion Park mall several blocks away. Among the tenants at Santa Anita are specialty shops such as Sam Goody, the music retailer, and J. C. Penney.

“In the short term, we are not financially viable,” said Hinshaw’s Moore, chairman and co-owner of the company, “and it is with deep regret that the board of directors had to make this decision. The last two years have been very difficult for the retail industry in general with the major retail recession, the Gulf War and the lack of traditional financing.”

The closing of the Hinshaw’s Arcadia store will follow the demise of the only other Hinshaw’s operation, a Whittier outlet that was shuttered in January. Hinshaw’s is the second privately held Southland department store to announce closing plans this month. Henshey’s, a Santa Monica retailer that has operated since 1925, said on June 3 that it will be forced to close next week.

Many independent department stores are failing because they cannot afford to keep up with the times, said Rosalind Wells, a retail economist at NPD Group, a market research firm in Port Washington, N.Y.

For example, she said many privately owned stores cannot afford the state-of-the-art computer equipment needed to closely track inventory and sales. Technological needs are often even more acute if the private department store is family owned, Wells said, because profits from those outlets are sometimes the sole source of income for the family.

In the Southland, family-owned department stores have been disappearing for decades. Nahas department stores, which operated in the San Gabriel Valley, closed in 1980 when the Nahas family opted for different business ventures. And the family-owned Ivers department store chain, founded in 1913, closed its historic Highland Park store on North Figueroa Street and sold two other local outlets in 1986.

Family-owned department stores in other parts of the country have also taken a beating. White’s of Leesburg, a family operation in Leesburg, Va., closed last year after 65 years in business.

Some are ready to write off the family-owned department store completely.

“The mom-and-pop department store is no longer viable,” said Leon Danco, president of the Center for Family Business, a Cleveland-based consulting firm. “Many (family department store operators) will have to go to find a niche--a narrow business in specialty retailing--to survive.”

However, even the larger privately owned department store retailers--those owned by investors who are unrelated--are vanishing. Wieboldt Stores Inc. shut down in 1987 after 103 years in business. Formerly a 13-store chain, Wieboldt was once a fixture on Chicago’s State Street, an artery once known as the city’s premier shopping strip.

Others have been takeover targets. Last year, Hartford-based Sage-Allen, one of Connecticut’s last independently owned department stores, was acquired by an affiliate of GE Capital, the Stamford, Conn., financial services giant. The 102-year-old Sage-Allen, which had been experiencing financial trouble, has 11 stores in Connecticut and New England.

However, even some department store giants--companies such as R. H. Macy and Carter Hawley Hale--are having difficulty in today’s market, observed John Schultz, head of the New York-based National Retail Federation.

“Many are having difficulty because the specialty chains--stores such as the Gap, the Limited and Herman’s--have been gaining market share,” Schultz said.

However, many San Gabriel Valley residents say they will miss Hinshaw’s because they have not been fans of specialty shops and large indoor malls.

“This was convenient because it’s nearby and I could get everything I need in one stop,” said Maria Arriola, a Temple City resident who bought two handbags at Hinshaw’s on Friday.

Many of Hinshaw’s customers have patronized the store for decades. They say they will miss the attentive service of sales clerks.

“The employees were always courteous,” said Whittier resident Bob Whitson as he loaded purchases into his car in Hinshaw’s parking lot. “I had shopped at the Whittier store in 1953. Now that this Hinshaw’s is closing, it’s the end of an era.”