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May Co. In Talks To Buy Steiger; Might Be Eyeing Some Macy’s Units

NEW YORK -- May Department Stores Co. reportedly is negotiating to buy the Albert Steiger Co., a 10-unit department store chain based in Springfield, Mass.<BR><BR>Meanwhile, reports concerning May Co. and R.H. Macy & Co. continued circulating...

NEW YORK — May Department Stores Co. reportedly is negotiating to buy the Albert Steiger Co., a 10-unit department store chain based in Springfield, Mass.

Meanwhile, reports concerning May Co. and R.H. Macy & Co. continued circulating Wednesday, with sources saying May Co. would be interested primarily in picking up some branches in the Atlanta and San Francisco markets in the event Macy’s is broken up. Macy’s is in Chapter 11 bankruptcy and discussing a reorganization plan with creditors. Management wants Macy’s to emerge from bankruptcy intact. However, Federated Department Stores is moving to merge with Macy’s, having became a player in the proceedings by purchasing a half interest in a $1 billion secured claim against Macy’s from Prudential Insurance Co.

Sources said the Steiger deal would involve purchasing at least six stores and converting them into units operated by May Co.’s Boston-based Filene’s division and the Lord & Taylor division, headquartered here. May Co., based in St. Louis, declined to comment on any of the reports. Ralph Steiger, president and chief executive officer of Steiger’s, said “I can’t comment on any rumors. They haven’t bought anything.”

May Co.’s interest in Macy’s and Steiger’s reflects the retailer’s desire to grow but at a cautious pace set by its chairman and chief executive, David Farrell. “David Farrell is a one-step-at-a-time person,” said a source. “Allen Questrom [chairman and ceo of Federated] goes for the big, bold strategy. They’re both merchants, but with different slants.

“Farrell is more detail-oriented and in the trenches,” the source continued. “He doesn’t have a big ego and doesn’t need to be the biggest. He takes risks, but they’re prudent risks to increase earnings and prosper. If something is too rich for him, he won’t go for it.”

May Co.’s last big play was for Marshall Field’s in 1990, but it was outbid by Dayton Hudson.

Steiger’s, a family-owned, 101-year-old firm, has posted annual volume of $80 million to $85 million in the last couple of years.

According to trade sources, in the first six months of 1993, Steiger’s lost $1.3 million. In 1992, the company lost $526,000 on sales of $81 million.

“It was once a very strong company, but it has been losing money for the past few years,” one credit source said. The company reportedly has been having difficulty meeting bank obligations.

The stores average 90,000 square feet and are in malls and strip centers. Eight units are in Massachusetts, two in Connecticut. The stores offer a wide range of moderate and upper moderate-priced merchandise for the family, but no furniture, large appliances or sporting goods.