It appears a venerated retailer may not disappear after all.
Five months after completing its merger with May Co., Federated Department Stores Inc. said it now plans to sell its Lord & Taylor division by year’s end 2006 rather than shutter or convert the stores into Macy's or another one of its store brands.
New York-based Lord & Taylor operates 55 stores in 12 states and Washington, DC, mainly along the East Coast and the Midwest. Lord & Taylor’s sales in 2004 were $1.57 billion.
"After a thorough review, we have concluded that Lord & Taylor does not fit with our strategic focus for building the Macy's and Bloomingdale's national brands," said Terry J. Lundgren, Federated's chairman, president and chief executive officer.
Since the merger, Federated has focused on converting most of the former May Co. stores into either Macy’s or Bloomingdale’s. For example, most of the Washington, DC-based Hecht’s stores are being converted into Macy’s.
In Federated’s monthly sales and quarterly earnings reports, Lord & Taylor will be identified as a discontinued operation. The company expects to reduce its fourth quarter 2005 earnings from continuing operations by about 10 cents per share.
Federated is using Goldman Sachs and JPMorgan Chase as advisers in the divestiture process.
Federated operates about 950 department stores and more than 720 bridal and formalwear stores in 49 states, the District of Columbia, and U.S. territories.