May Department Stores Co. will buy Marshall Field’s 62 department stores from Target Corp. for $3.24 billion in cash. The deal includes three distribution centers and nine Mervyn’s stores in the Twin Cities.
May will keep the Field’s name and other signature brands, such as Frango mints. Linda Ahlers will remain as president of Field’s, which will keep its headquarters in Minneapolis.
Field’s stores, all in eight Midwestern states, complements May’s stable of department stores including Lord & Taylor, Filene’s and Strawbridge’s. The addition of Field’s gives May 500 department stores in 39 states, reporting $12.7 billion in sales for fiscal 2003 ended Feb. 1. St. Louis-based May expects that economies of scale will save $85 million in fiscal 2005, $140 million in 2006 and $180 million each year after that.
“This unique opportunity to add to our department store portfolio…will allow us to combine the best of Marshall Field’s and May to enhance the products and services we can provide to our customers. …This combination will produce excellent economies of scale, improved buying power, and an expanded distribution network,” said May Chairman-CEO Gene Kahn in a statement.
The deal is expected to close by October, once it gets SEC approval. May will offer jobs to all of Field’s 25,000 staffers.
Minneapolis-based Target continues to mull plans for Mervyn’s other 257 stores, mostly in the West. The mid-scale chain had sales of $3.6 billion in 2003. Target expects to announce Mervyn’s fate by mid-September.
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