DENVER—A Colorado clothing store chain with roots in the Great Depression is the latest shuttered company President Barack Obama’s campaign is tying to presumptive Republican presidential nominee Mitt Romney.
But some threads are missing in the Democrats’ account of the demise of Fashion Bar, a Colorado-based clothing store chain. Fashion Bar stores disappeared after they were acquired in 1992 by a Houston retailer called Specialty Retailers Inc., later renamed Stage Stores Inc. The largest shareholder of Specialty Retailers was Bain Capital, the private equity firm Romney helped create.
Fashion Bar started as a hosiery store in Denver in 1933, opened by Jack and Hanna Levy, Jewish siblings who had emigrated from Germany. By the 1980s the Fashion Bar chain had more than 80 stores, most of them in Colorado.
Fashion Bar was down to about 40 stores when Specialty Retailers acquired the chain in 1992. A decade later all Fashion Bar locations had closed.
At a news conference for Colorado reporters Friday, Obama surrogates called Colorado’s Fashion Bar story an example of Romney putting profits ahead of people. A look at some of the Obama campaign’s assertions about Romney’s role in Stage Stores and Fashion Bar’s fate and how they compare with the facts:
OBAMA CAMPAIGN: “They cashed out, made millions of dollars, and the people that suffered were the little people that worked in those jobs,” said former Denver mayor Wellington Webb, a Democrat.
THE FACTS: Webb is talking about Romney’s firm’s involvement not with Fashion Bar but with Specialty Retailers, which acquired Fashion Bar amid other expansions at the time and later changed its name to Stage Stores. When asked how many Fashion Bar jobs were lost by the stores’ closures, Webb and the Obama campaign staff couldn’t say exactly. A campaign spokesman later said that Fashion Bar employed 1,000 people when the chain was acquired by Specialty Retailers, but it wasn’t immediately clear how many lost their jobs when Fashion Bar shuttered.
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OBAMA CAMPAIGN: “The goal is not to create jobs, but to create wealth for his business investors,” said Obama’s Colorado campaign spokesman, Michael Amodeo.
THE FACTS: Obama’s campaign isn’t the first to make this argument of Bain Capital and Stage Stores. This claim was also made in a 1999 class-action lawsuit filed against Stage Stores in Houston. Investors sued Stage Stores, Bain Capital and other firms, alleging mismanagement and insider trading. However, a federal judge dismissed the lawsuit in 1999, and the dismissal was upheld on appeal.
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OBAMA CAMPAIGN: Stage Stores declared bankruptcy in 2000.
THE FACTS: This claim is true, but the story doesn’t end there. Stage Stores emerged from bankruptcy a year later and still exists, though the Fashion Bar chain of stores was not revived. Stage Stores currently owns 820 department stores in some 40 states and employs about 14,000 people, according to business information provider Hoover’s. Stage Stores owns the Peebles, Bealls, Stage, Palais Royal and Goody’s chains. The Obama campaign pointed out that Romney was no longer with Bain Capital when Stage Stores reorganized and exited bankruptcy.
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OBAMA CAMPAIGN: “In Romney’s economic philosophy, CEOs and wealthy investors prosper by any means necessary, even when it meant companies failed and workers were left behind,” according to a news release from Obama’s Colorado campaign.
THE FACTS: Here, the link to Romney is threadbare.
In 1998, Tooker told the industry publication Shopping Centers Today that the Fashion Bar acquisition was a “strategic mistake, because most of its stores were located in major regional markets with a lot of competition.” The industry publication noted that Stage Stores preferred a strategy of acquiring clothing stores in rural areas with less competition and lower advertising costs. In that context, the company’s acquisition of Fashion Bar may indeed have been a mistake.
In any case, Romney was never quoted as calling Fashion Bar’s purchase a “mistake,” and the Obama campaign showed no proof that Romney made the call to close Fashion Bar stores.
