An account of changes in ownership of Garfinckel's in the Business section June 22 failed to note that Raleighs, briefly owned by the same interests that owned Garfinckel's, was sold in 1988 to Hartmarx Corp. and no longer is affiliated with Garfinckel's. (Published 6/30/90)

It once was Washington's most glittering retail emporium, the clothier of choice for Washington's rich and powerful and stylish.

Garfinckel's was the place where many a Washington lad got his first real suit and where the area's young women purchased their fancy dresses. For generations, Garfinckel's gowns and tuxedos were welcome guests at Washington dinner parties and formal events. Legions of Washington women took weekly trips to the big store at the corner of 14th and F streets NW for lunch in the Greenbrier Restaurant and an afternoon of browsing -- and buying -- among the merchandise displayed on the store's seven floors.

"When I was a kid growing up in Washington, I remember my mother would take a streetcar and it would be an event to go downtown and shop in Garfinckel's," recalled David Pensky, who grew up to co-found and run the Britches of Georgetown clothing chain. "That was the nicest store in Washington. ... It's always been an institution here."

But national and local retail tastes and trends changed, the rise of the suburbs profoundly affected shopping patterns, glitzy competitors from out of town set up shop in the area and, over time, Garfinckel's importance to the local carriage trade went out with the buggy whip.

Buffeted by numerous changes of ownership in the past decade, repeated switches in management and strategic focus and ever-increasing competition, the clothing store chain founded by Julius Garfinckel in 1905 rapidly lost ground even as the affluent market that it once dominated grew exponentially over the past decade.

The decision by Garfinckel's owners to file for protection from its creditors under Chapter 11 of the federal bankruptcy laws yesterday was, to many observers in the Washington retail community, a sad inevitability.

As rumors of the company's financial problems swirled in recent months, its competitors lamented the impending loss of the grand old lady of Washington retailing, all the while clucking over the series of management mistakes, financial follies and just plain bad luck that had reduced Garfinckel's to the position of also-ran in the hot and heavy local retail race.

"Garfinckel's is not Garfinckel's any more," one competitor said last winter, his mind on the stores' sparse merchandise selection -- and sparse customer traffic -- during the busy Christmas season.

In some ways, Garfinckel's recent history reflects the history of American retailing over the past decade -- one marked by takeover activity, financial machinations and scrambling to keep up with ever-changing trends in an increasingly competitive marketplace.

A generation ago, Garfinckel's was the flagship of a small but significant retail empire. As ownership of the company passed from the Garfinckel family to public shareholders, the chain added such names as Brooks Brothers, Ann Taylor and Richmond's Miller & Rhoads, assembling a collection of well-known regional department stores and specialty clothing chains.

Over the years, Garfinckel, Brooks Brothers, Miller & Rhoads Inc., as the conglomeration was known, fended off hostile takeover attempts from Genesco Inc. and Gamble-Skogmo Inc. before finally accepting a $228 million offer from Allied Stores Corp. in September 1981 -- at the time the largest corporate takeover in Washington history.

An aggressive push by Garfinckel's into the burgeoning Virginia and Maryland suburbs during the 1970s seemed to stall under the new ownership. And Garfinckel's ownership situation and strategic direction were further muddled in 1986 when its parent Allied was acquired by Canadian real estate giant Campeau Corp.

The new owners put Garfinckel's up for sale to help pay some of the debt incurred in the $3.6 billion buyout of Allied. After months of bidding, Garfinckel's got new ownership: Raleighs Stores Corp., which had recently been bought by a group headed by retail veteran Neal J. Fox, acquired Garfinckel's with the backing of Middle Eastern investors led by Wafic Said, a Saudi who is also the controlling shareholder of Washington Bancorporation.

Garfinckels, Raleighs & Co., as the combined entity was dubbed after Fox completed the $95 million takeover, attempted to remake Garfinckel's in a more modern image, adding more designer clothes and seeking a stylish, upscale customer.

But that customer didn't seem interested in coming to Garfinckel's, illustrating a cruel reality of the changing retail market in Washington. The younger, more affluent customers that Fox's Garfinckel's was seeking were more attracted to hip specialty stores such as The Limited or trendy national department stores such as Bloomingdale's that had begun arriving in the Washington area in the 1970s.

At the same time, the new Garfinckel's seemed to alienate its older customers. "People were just {saying}, 'What's going on there? I don't recognize the salespeople or the clothes. I just don't recognize what's going on there any more,' " said Stacy Dutton, a retail industry analyst at Morgan Stanley & Co. in New York who grew up in the Washington area and whose family shopped at Garfinckel's.

Perhaps the biggest competitive challenge to Garfinckel's came in 1988 with the opening of Nordstrom at Tysons Corner -- a store whose upscale clientele spanned both the audience Garfinckel's wanted and the one it once had. The new Nordstrom store did a then-record $100 million in business in its first year, and there was little doubt among local retail executives about which local chain had been hurt the most by Nordstrom's spectacular debut.

At the same time, Garfinckel's was grappling with the difficult mathematics of 1980s-style corporate finance. Fox had borrowed considerably to buy Raleighs in 1984, and he went further into debt with the purchase of Garfinckel's. Efforts to sell assets -- including the downtown store, which was then leased back -- went more slowly than planned, and the deteriorating business conditions put further pressure on the company.

In late 1988, the Arab investors who had backed Fox ousted him and took control of their investment, appointing former Garfinckel's executive George P. Kelly as president. Kelly vowed to revive Garfinckel's, returning the merchandise selection to the more conservative styles all but abandoned under Fox, opening a new store on Connecticut Avenue and laying plans for the opening of smaller, more economical Garfinckel's stores.

But problems continued to haunt the chain -- it lost its leases at two key Northern Virginia shopping malls, Tysons Corner Center and Fair Oaks Mall, leaving it without outlets in one of the region's fastest-growing, most affluent areas,; and sales continued to disappoint, as longtime Garfinckel's customers took their business elsewhere.

"The Washington retail environment has just become too competitive," Dutton said. "As the big powerhouses began to move in -- Bloomingdale's and Neiman Marcus in the 1970s and more particularly Nordstrom's recently, those were competitive strengths that I think were bigger than {Garfinckel's}."

Dutton noted that Garfinckel's isn't the only old-time Washington retailer to hit turbulence over the past few years; Woodward & Lothrop and Hecht Co. have changed ownership and such names as Lansburgh's and Jellef's have completely disappeared from the local scene, echoing a trend seen elsewhere in the nation as regional department stores have lost competitive ground to more cost-efficient, aggressive national chains. "We have seen literally 20 or 30 years of the smaller retail chains disappearing, particularly the ones that were based in the older East Coast cities," she said.

But Garfinckel's was special.

"Long after it lost its competitive edge, it remained a wonderful name," Pensky said. "They just didn't keep up with the competition as competition kept moving in. They just didn't keep up with the forefront of the better market."

1946 -- Julius Garfinckel & Co. Inc. acquires Brooks Brothers.

1965 -- Company repels hostile takeover effort by Genesco Inc.

1967 -- Richmond department store Miller & Rhoads is acquired, creating Garfinckel, Brooks Brothers Miller & Rhoads Inc.

1977 -- Ann Taylor women's clothing chain is acquired.

1979 -- Company repels hostile takeover attempt by Gamble-Skogmo Inc.

1981 -- Allied Stores Corp. acquires Garfinckel, Brooks Brothers, Miller & Rhoads for $228 million.

1986 -- Campeau Corp. acquires Allied and announces plans to sell Garfinckel's.

1987 -- Raleigh Stores Corp. acquires Garfinckel's for $95 million.

1988 -- Neal J. Fox, head of Garfinckel's, Raleighs & Co. is fired by Arab investors who backed the company and is replaced by George P. Kelly.

1989 -- Garfinckel's closes its store in Tysons Corner Center after the center's landlord declines to renew the lease.

March 1990 -- Garfinckel's closes its store in Fair Oaks Mall after the lease is not renewed.

June 21, 1990 -- Garfinckel's files for protection from its creditors under Chapter 11 of the federal bankruptcy code, announcing plans to close all but two of its stores.