Saks Inc. Sells 142 Stores to The Bon-Ton
Birmingham, Ala., Saks Inc. agreed to sell its Northern Department Store Group (NDSG) to The Bon-Ton Stores, Inc. for $1.1 billion in cash plus the assumption of approximately $85 million of liabilities, including approximately $35 million in capitalized leases.
York, Pa.-based Bon-Ton will acquire 31 Carson Pirie Scott stores, 14 Bergner’s stores, 10 Boston Store units, 40 Herberger’s stores, and 47 Younkers stores—a total of 142 NDSG units. The 142 stores being sold represent 15.1 million gross sq. ft. and are located throughout 12 Midwestern and Great Plains states. NDSG generated 2004 revenues of approximately $2.2 billion.
“The acquisition of Northern Department Store Group significantly broadens Bon-Ton’s reach and presence, and represents a logical next step for us following our successful integration of Elder-Beerman,” said Bud Bergren, president and CEO of Bon-Ton. “The transaction solidifies and strengthens our position in the Midwest and extends our footprint into the Great Plains states.”
The transaction is expected to be completed early in the first fiscal quarter of 2006. Closing is subject to certain conditions, including Bon-Ton’s financing for the transaction, the expiration or termination of all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, and various other conditions. Bank of America, N.A. has executed a commitment letter with Bon-Ton to provide for the financing of the transaction.
Bon-Ton has indicated plans to retain the various store nameplates of the acquired stores.
Back in July, Saks sold its Proffitt’s/McRae’s business to Belk for $623 million.
Amazon, Drugstore.com Part Company
Seattle, It’s a classic case of “He said, she said.” Or, in this instance, “They said, they said.”
On-line retail pioneers Amazon.com and Drugstore.com, partners since 2000, have split. Drugstore.com has been paying to have its products carried prominently on Amazon’s site.
While Seattle-based Amazon implied it had initiated the breakup—by being the first to send out an announcement in the form of a press release—Drugstore.com CEO Dawn Lepore was quick to leap, telling investors on the company’s quarterly conference call yesterday afternoon that she was the one who made the phone call to Amazon to terminate the agreement.
Both had their reasons to part company. According to Amazon, which owns a 14% stake in Bellevue, Wash.-based Drugstore.com, its newly built relationships with major health-and-beauty brands such as Proctor & Gamble and Johnson & Johnson made its deal with Drugstore.com unnecessary. Drugstore.com, on the hand, said that the partnership represented a small and shrinking part of its business.
Federated Names Two Board Members
Cincinnati, Joyce Roche and William Stiritz have been elected to the Federated Dept. Stores’ board of directors.
Roche is president and CEO of Girls, Inc., and Stiritz is the retired chairman and CEO of Ralston Purina Co. Both were directors of The May Dept. Stores Co. at the time of May’s merger with Federated.