Federated Puts Lord & Taylor Chain on Sale
{{#rendered}} {{/rendered}}Federated Department Stores Inc. (FD) Thursday put its 55-store Lord & Taylor chain up for sale so it can focus on building its Macy's and Bloomingdale's brands.
The retailer, which acquired the Lord & Taylor chain when it bought May Department Stores last year, said it will classify the chain as a discontinued operation, reducing fourth-quarter income from continuing operations by about 10 cents per share.
The company said it expects to complete the transaction before the end of 2006.
{{#rendered}} {{/rendered}}The chain generated 2004 sales of $1.6 billion.
Federated is putting a Macy's nameplate on other stores it acquired in the May deal such as Marshall Field's, but conspicuously left Lord & Taylor out of those plans, leading analysts to believe the chain would be sold.
In a research note released Thursday, Citigroup analyst Deborah Weinswig said among her 2006 predictions that upscale retailer Saks Inc. would be taken private and combined with Lord & Taylor.
{{#rendered}} {{/rendered}}Private equity firms have been snapping up retailers in recent years, attracted by valuable real estate portfolios and the prospect of turning around underperforming companies and selling them at a premium.
Goldman Sachs and JPMorgan Chase are advising Federated, whose shares were up $1.51, or 2.11 percent, at $73.14 on the New York Stock Exchange.