STORE SPACES

Charming Shoppes and Collective Brands are acquired

BY Marianne Wilson

New York — The retail industry is still assessing the impact of two major deals that occurred within 24 hours of each other. On Tuesday, May, 1, shoe manufacturer Wolverine Worldwide Inc. and equity firms Blum Capital Partners and Golden Gate Capital agreed to acquire footwear giant Collective Brands Inc., operator of Payless Shoe Source, in a deal valued at $2 billion, including assumption of debt. And on Wednesday, May 2, Ascena Retail Group said it will acquire Charming Shoppes Inc., parent company of Lane Bryant, for about $890 million.

Here are more details:

Collective Brands: Under the terms of the Collective Brands transaction, Blum Capital and Golden Gate will jointly acquire the operations of Payless ShoeSource and Collective’s international-licensing arm. Those units had $2.4 billion in revenue in the latest fiscal year and operated more than 4,300 stores, globally.

Wolverine will acquire Collective Brands’ Performance + Lifestyle Group, which includes the Sperry Top-Sider, Saucony, Stride Rite and Keds brands. The brands will join Wolverine’s existing portfolio, which includes Hush Puppies, Merrell and Wolverine.

Charming Shoppes: The acquisition of Charming Shoppes gives Ascena, which owns the Dressbarn, Maurices and Justice chains, entry into the steadily-growing large-size women’s clothing market. In addition to Lane Bryant, Charming Shoppes also owns the Fashion Bug and Catherines Plus Sizes banners, for a total of more than 1,800 stores nationwide. In 2011, nearly 85% of Charming Shoppes’ sales involved plus-sized apparel.

Upon completion of the deal, which has been approved by both boards, Charming Shoppes, which is based in Bensalem, Pa., will become a subsidiary of Ascena.

“Charming Shoppes is a superb strategic fit for Ascena,” said David R. Jaffe, president and CEO, Suffern, N.Y., which operates more than 2,500 stores. “Over the past few years, we have welcomed into our family new brands and new team members while delivering increasing value to shareholders. We believe that Charming Shoppes will be no exception.”

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I.Adler says:
Jan-22-2013 03:01 pm

Marianne, I'm not sure which
Marianne, I'm not sure which is which. In the information about Charming Shoppes, is it the large-size women who are steadily-growing or is it the market for their clothing? Must admit, the wording made me laugh. slimandhealthy101

I.Adler says:
Jan-22-2013 03:01 pm

Marianne, I'm not sure which is which. In the information about Charming Shoppes, is it the large-size women who are steadily-growing or is it the market for their clothing? Must admit, the wording made me laugh. slimandhealthy101

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Microsoft/Barnes & Noble Joint Venture: Winning proposition for both companies

BY Marianne Wilson

On Monday, Barnes & Noble Inc. and Microsoft announced a strategic partnership in a new unnamed Barnes & Noble subsidiary that, for the time being, is being identified as Newco. Here some comments from retail consultant Maggie Gilliam (Gilliam Insights) on the new venture:

One of the first benefits will be the introduction of a NOOK app for Windows 8 that will extend the immense Barnes & Noble digital bookstore to hundreds of millions of Windows customers worldwide. To date, NOOK has been only domestic. In addition, the NOOK study software will be available on the Microsoft platform for distribution and management of digital educational materials.

It is evident that both Microsoft and Barnes & Noble see new vistas opening in the world of eReading in the form of compelling customer experiences, but neither side is disclosing much at this time. The words interactive and multimedia came out during the conference call, and we can dream about new applications of Microsoft’s Kinect technology, for starters. In any event, Microsoft claims to have a lot to add to eReading besides being a platform provider. And the joint venture gives takes Microsoft into the eReader and eBook world with a library and degree of expertise that both Apple and Google are trying to achieve.

In forming Newco, Barnes & Noble has unleashed some shareholder value—the stock opened up 88.5% on the announcement—but the market clearly isn’t appreciating the company fully. After reaching an intraday high of $26, the stock closed at $20.66, up 51%, where the market value totals $1.2 billion, or less than the company’s 82.6% share in Newco estimated at $1.4 billion. (Editor’s note: Figures are for Monday, April 30.)

Thus, the market is giving negative value to the company’s profitable bookstores, which should not be written off. They are not just important in the sale of eReaders, but for future physical eCommerce, whose success we believe very strongly lies in multiple channels that enable consumers to purchase when, where and how they choose.

Moreover, a good interactive experience at the store level can be a profound contributor to sales success. Apple has demonstrated that stores can be a valuable asset. And Barnes & Noble is succeeding in making its stores family gathering places with dedicated educational play areas for kids. Moreover, stores are the biggest differentiators from Amazon.

Microsoft has its Microsoftstore.com and has opened 18 stores with two more coming this spring. They seem to be doing well, but unlike Apple, Microsoft does not have a list of blockbuster consumer products. On the other hand, Microsoft can sell a broad range of its customers’ products and offer an interesting selection. Barnes & Noble has 700 stores, many in prime locations, and while neither company is making any commitment, possibilities here could be interesting.

We think this JV could be a winning proposition for both companies.


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Ascena gains access to plus-size market with Charming Shoppes buy

BY CSA STAFF

SUFFERN, N.Y. — The Ascena Retail Group will acquire Charming Shoppes Inc., parent company of Lane Bryant, for about $890 million.

The move gives Ascena — which owns the Dressbarn, Maurices and Justice chains — entry to the steadily-growing large-size women’s clothing market. In addition to Lane Bryant, Charming Shoppes also owns the Fashion Bug and Catherines Plus Sizes banners. It operates more than 1,800 stores nationwide. In 2011, nearly 85% of Charming Shoppes’ sales involved plus-sized apparel.

Upon completion of the deal, which has been approved by both boards, Charming Shoppes, which is based in Bensalem, Pa., will become a subsidiary of Ascena.

“Charming Shoppes is a superb strategic fit for Ascena,” said David R. Jaffe, president and CEO, Suffern, N.Y., which operates more than 2,500 stores. “Over the past few years, we have welcomed into our family new brands and new team members while delivering increasing value to shareholders. We believe that Charming Shoppes will be no exception.”

Charming Shoppes announced last December that it was examining alternatives for the company.

“In addition to partnering with a buyer that can support the future growth and development of our businesses, the $7.35 per share consideration represents a premium of 25% to the closing market price of Charming Shoppes common stock on May 1, 2012,” Michael Goldstein, board chairman of Charming Shoppes, said in a statement. “We are confident that this transaction is in the best interests of our shareholders.”

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