NORMAN — At age 90, Harold Powell has managed to outlive Harold’s Stores Inc., the upscale clothing chain he founded from a single shop across the street from the University of Oklahoma in 1948.
“It’s quite remarkable — he just keeps on going,” said his wife, Ann Powell.
At one time, Harold’s had 53 stores that spanned 22 states. Harold’s Stores annual sales topped $150 million, and the company employed as many as 1,800 people before filing for bankruptcy and closing all of its stores in 2008 in the middle of the financial crisis.
Harold Powell still wears a thick gold ring on his left ring finger next to his wedding band engraved with the image of an antique carousel horse, a longtime logo and mascot for Harold’s Stores.
The rights to the carousel horse logo, along with Harold Powell’s name, once used to brand everything from neckties to raincoats, which eventually were liquidated through the bankruptcy court, along with all of the company’s assets.
Harold Powell was retired, and had sold most of his stock years before Harold’s Stores filed for bankruptcy. The company’s headquarters had moved to Dallas and had since come under the control of a group of preferred shareholders — Williams-Sonoma Chairman and CEO and Durant native Howard Lester and Ronald de Waal, a Dutch-born entrepreneur and former vice-chairman for Saks Inc.
“A lot of success is just about luck and timing,” Powell said. “The same with failure.”
The original carousel horse, a massive antique Harold Powell purchased decades ago from a warehouse in New York, still resides in daughter Rebecca Powell Casey’s Texas vacation home. The family calls the horse Lynn.
Casey has fond memories of her and her brother and sister lining up in front of Lynn at the Norman Harold’s store for family photos as a child.
“He was like a fourth sibling to me growing up,” Casey recalls.
Traces linger in Norman
The Powell family has had a presence on Norman’s Campus Corner for three generations, which continues today.
In 1927, Harold Powell’s parents, Ruby “Dutchie” and H.E. Powell opened Sooner Drug, a drug store and soda fountain on Campus Corner. Harold Powell grew up helping out around the drug store and returned to Campus Corner after serving in the Navy to open Harold’s in 1948.
The store initially sold exclusively menswear and was one of the first stores west of the Mississippi to carry clothing in the styles favored at East Coast Ivy League schools.
“It was more a philosophy than a style of dress,” Harold Powell recalls. “It was more conservative and very understated.”
Harold’s added a women’s boutique in 1958 featuring clothing in the same preppy, East Coast college town styles. By the late 1970s, Harold’s had launched its own credit card and had opened stores in high-end shopping centers across the region, including Oklahoma City, Tulsa and Dallas.
Harold’s Stores Inc. went public in 1987 and launched a successful clothing catalog in 1990. Going public allowed Harold’s to grow and to open dozens of new stores over subsequent years. At one time, the company had its own trucks and distribution center on Lindsey Street in Norman.
“The retail market was changing and they began to manufacture their own products, and that required additional quantities and volume,” said Harold Powell’s son, H. Rainey Powell, who served in various leadership positions at Harold’s Stores, including president and chief financial officer.
Traces of Harold’s still linger in Norman and the Powell family continues to control a large chunk of the real estate on Campus Corner. A small shopping center on Buchanan Avenue is still called Harold’s Square.
Cafe Plaid, a restaurant Harold’s opened up next to the original Harold’s store on Boyd Street in Norman in 1996, remains a busy lunch spot, but operates under different ownership.
Facing an alleyway on Campus Corner, some of the original gold leaf and dark wood signage from the original Harold’s store still exists, although the cloth awning is torn and faded.
“That’s what landlords call deferred maintenance,” joked H. Rainey Powell, who manages the family’s real estate holdings.
By 2001, a new investment group controlled Harold’s, and the company’s headquarters had moved to Dallas. Lester and de Waal loaned Harold’s millions of dollars over the next several years to keep it afloat as it posted operating losses for several successive years.
“We had never had a year where we took a loss before,” Harold Powell said.
By 2005, the company encountered significant “merchandising problems, as it tried to appeal to younger shoppers,” the company’s directors and executives said in legal documents.
“The main problem, management concluded, was that its core customers preferred ‘classic’ clothing, but the company had veered into trendy and youth-oriented merchandise,” Harold’s directors and officers argued in legal briefs.
The company had alienated many of its customers by trying to change the style of Harold’s clothing, H. Rainey Powell said.
“My dad kind of started with a philosophy of dress, and they kind of moved away from that and moved away from their customer base,” he said.
Hurricanes in 2005 also led to abysmal sales declines in Texas, Louisiana and Mississippi. The company lost $6 million in 2005, and $11 million in 2006, according to court documents.
Harold Powell’s daughter, Rebecca Powell Casey, who once served as CEO and later, executive vice president, stepped down from her position as CEO in 2001 and later relinquished her seat on the board of directors. In a resignation letter sent to the board, Casey said she had lost faith in the company’s leadership.
“Over the past five years, Harold’s has lost its focus, creative energy, and, sadly, the heritage and loyalty that was nurtured and developed over its first 50 years,” Casey said in her resignation letter. “I do not believe that our current management or board can remedy this situation. I have enjoyed my long association with Harold’s and I am sorry that it has to end this way.”
Harold’s Stores continued to be unprofitable for the next two years before filing for Chapter 11 bankruptcy in November 2008 in the thick of the financial crisis. The bankruptcy was later converted to a chapter 7 and a trustee began the lengthy process of liquidating Harold’s assets to satisfy its debts.
De Waal lost $23.5 million on his investments in Harold’s Stores, attorneys for the company’s directors and executives claim in court documents. Lester lost at least $15 million.
Trustee sues executives, directors
In 2009, Douglas Gould, the trustee in charge of Harold’s Stores’ liquidation, moved to sue Harold’s directors, controlling shareholders and executives, claiming Harold’s Stores Inc. had paid out $5.8 million in illegal dividends to the company’s preferred shareholders over a series of several years although the company was operating in the red. Gould also alleged de Waal and Lester had loaned Harold’s Stores millions of dollars on onerous terms, essentially bleeding the company dry and contributing to its insolvency.
The trustee’s lawsuit was scheduled to go to trial earlier this year, but the parties moved to settle the case in February for $2 million.
Attorneys for De Waal, Lester’s estate and the company’s other directors and executives did not respond to requests for comment. In court documents, de Waal, Lester and Harold’s leadership disputed the trustees claims, and countered that de Waal and Lester had only good intentions when they loaned Harold’s Stores funds to continue operating.
“The hope was, with additional capital, the company could once again turn its fortunes around,” Harold’s leadership argued in legal briefs. “At bottom, it is downright absurd to claim that any damage was done to the company by lending it millions of dollars that it spent on operating needs.”
The company’s directors also denied any claims that they breached their fiduciary duties to Harold’s by approving millions in preferred stock dividends for de Waal and Lester before filing for bankruptcy.
H. Rainey Powell said it was a sad day for the family when Harold’s Stores closed the original Campus Corner store after filing for bankruptcy. The site of the original store on Boyd Street now houses the OU IT store.
Casey recalls digging through the Dumpsters to salvage anything she could of the company — her family’s history.
Harold’s lives on in many people who got their start in retail from Harold Powell, she said.
“He mentored so many people who went on to work in the industry,” she said.
This story is part of a series on Oklahoma’s forgotten retail chains.