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Buffums, a Southern California department store chain that has struggled in recent years, said Friday that it has retained bankruptcy lawyers to review ways to “downsize.” John Duncan,

president and chief executive of the 87-year-old company, said no final decision has been made on Buffums’ future but an announcement could come next week. He said the 16-store chain is

still considering such other options as putting itself up for sale, seeking an acquisition or simply continuing to operate in its current form. Retaining bankruptcy lawyers from the Los

Angeles firm of Buchalter, Nemer, Fields & Younger “is just part of doing our homework,” Duncan said. A lawyer who asked not to be identified said the Buchalter firm is working on a plan

to liquidate the company and pay off its bills while avoiding going into bankruptcy. The source said Buffums’ owner, Adelaide Steamship Co. of Australia, wants to avoid antagonizing

creditors that supply its other retailing operations. Among various other diversified holdings, Adelaide owns David Jones Ltd., a major upscale department store chain in Australia. Early

last week, several major credit agencies began urging suppliers to curb or withhold shipments to Buffums amid concerns about the Long Beach-based company. Many suppliers appear to have

followed that advice, although Buffums has said business is continuing as usual. Credit agency analysts said Buffums generally has had a record of paying its bills on time but many suppliers

are nervous about the chain nevertheless, largely because of the rash of bankruptcies in the retailing industry. Many of Buffums’ suppliers also sell to Los Angeles-based Carter Hawley Hale

Stores, which filed for Chapter 11 bankruptcy protection last month. Buffums, which prospered in the 1960s, has suffered in recent years from an image as an old-fashioned retailer catering

to aging shoppers. It lost more than $4 million on sales exceeding $100 million in its fiscal year ended last June. Unlike many of the chains that have failed recently, Buffums is relatively

debt free, and its net worth is estimated at $25 million. Still, Adelaide has been troubled by a huge debt burden, and it announced a plan in November to restructure its finances. Adelaide

officials have declined to return phone calls the past two weeks. The company’s holdings include Eastman Inc. of Signal Hill, a major distributor of office furniture and supplies. In recent

years, Adelaide has alternately put Buffums up for sale and taken steps to revitalize the business. In August, the company named Duncan, who had been chief operating officer of Eastman, to

head the retail chain. Buffums also invested in store remodelings, including improvements at its stores in Westminster and Newport Beach. The chain dates to 1904, when two brothers from

Illinois, Charles A. Buffum and Edwin E. Buffum, purchased a dry goods store near Pine Avenue and Broadway in Long Beach. The Buffum family eventually expanded the business and became

prominent in Southern California. Charles Buffum’s daughter, Dorothy Buffum Chandler, was the driving force behind the creation of the Music Center of Los Angeles County and is the widow of

Norman Chandler, third publisher of the Los Angeles Times. David Jones Ltd., a unit of Adelaide, acquired then-publicly held Buffums in 1974 with a $21.5-million tender offer. Buffums has

1,100 full-time employees. MORE TO READ