NEW YORK — Federated Department Stores Inc. said Monday it would sell 10 stores to Boscov’s Inc., which is among the few family-owned and operated U.S. department stores. Terms of the deal were not disclosed.
It is the first in what will be a series of asset sales by Federated through the third quarter of this year because of its $17 billion acquisition of May Department Stores Co. in 2005, creating a retail giant with an estimated $27 billion to $28 billion in sales.
The 10 stores Boscov’s is purchasing are part of a group of 78 units that Federated announced it would sell to satisfy regulatory concerns and duplicative locations and help reduce debt. Other possible buyers for sites on the selling block include Dillard’s Inc., J.C. Penney Co. Inc., Nordstrom Inc., Sears Holdings Corp. and Bon Ton Department Stores Inc. Federated won’t lose any territory with its deal with Boscov’s since the 10 stores are in malls where the company already operates another store.
As part of the disposition strategy, Federated will also sell off Lord & Taylor and David’s Bridal and other bridal and formalwear stores. The company is also eliminating several familiar regional nameplates that were under the May umbrella, including Marshall Field’s, Foley’s and Robinsons-May.
The companies did not disclose the total volume for the 10 stores, but the acquisition is a major growth move for Boscov’s. The $1.1 billion Reading, Pa.-based department store chain operates 40 units in Delaware, Maryland, New Jersey, New York, Pennsylvania and Virginia. The 10 additional stores are the two Kaufmann’s in Monroeville and Pittsburgh, Pa.; three Macy’s in Glen Burnie, Owings Mills and Perry Hall, Md.; and five Strawbridge’s in Deptford, N.J., and Whitehall, North Wales, Langhorne and Willow Grove, Pa.
Clearance sales at the locations began on Jan. 29.
Boscov’s said last week that it had decided to remain independent after considering putting itself up for sale, and announced a changing of the guard in its leadership with the retirements of chairman Albert Boscov and president Edwin Lakin. Ken Lakin, the son of Edwin Lakin and nephew of Albert Boscov, who has been running the department store as chief executive officer, is stepping up as chairman and ceo of the corporation, the holding company for the department stores.
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Lakin said last week that 10 new stores were planned, but did not mention the Federated deal. Lakin could not be reached Monday to discuss his plans for the stores being acquired.
Boscov’s has a tradition of maintaining a soup-to-nuts assortment, selling everything from garden supplies, sporting goods, luggage, furniture, apparel and accessories to homemade fudge. Macy’s, however, in recent years, has downsized or eliminated certain categories, such as electronics.