Movie Gallery to Acquire Canada Chain
Dothan, Ala., While it works to finalize its acquisition of Hollywood Entertainment, Movie Gallery has marked another video-rental chain for takeover—this time it’s Canadian rival VHQ Entertainment, which operates 61 stores in Alberta and Saskatchewan. Movie Gallery will take over VHQ for $16.5 million, including assumed debt, in a deal expected to close in the second quarter of 2005. The deal will bolster Movie Gallery’s 200-store presence in Canada. Movie Gallery’s intention to acquire Hollywood, however, was put in doubt by a higher bid from video-giant Blockbuster, offered straight to Hollywood shareholders.
Wal-Mart Canada Store to Vote on Unionization
Windsor, Ontario, Wal-Mart workers in Windsor, Ontario, will soon vote on whether to be represented by a union. The United Food and Commercial Workers Canada (UFCW) today said that it filed an application for certification with the Ontario Labor Relations Board, and an employee vote on unionization is expected to happen as early as next week.
When a Wal-Mart store in Jonquiere, Quebec, unionized early last month, the company closed the store, arguing that union demands were threatening the store’s business. Shortly thereafter, the Quebec Labour Relations Commission told Wal-Mart Canada to stop intimidating employees who wished to unionize. The UFCW has successfully unionized a Wal-Mart branch in Saint-Hyacinthe, Quebec, and said it has 12 other applications for certification pending with the labor board.
May-Federated Merger Could Stress Vendors
New York City, The May-Federated merger, which would create a $30 billion retailer, may put stress on department store vendors, according to analysts. Consolidation may cause store closings and reduce the number of outlets for apparel makers’ merchandise. Additionally, the combined force of May and Federated may leave vendors with less price negotiation leverage.
Fashionable, premium-priced vendors such as Liz Claiborne and Polo Ralph Lauren will likely fare best in the altered department store environment, according to Merrill Lynch analysts. Manufacturer Jones Apparel, which includes Jones New York, Anne Klein, Evan-Picone and Kasper, may be left vulnerable since about one-quarter of its revenue comes from sales to May or Federated stores. Analysts say that manufacturers with distribution channels outside the department store sector will be left less vulnerable to the merger.