SEARS PURCHASE OF WANAMAKER UNIT SNAGGED

Byline: David Moin and Jeff Siegel

NEW YORK--The sale of the John Wanamaker store in Yonkers to Sears, Roebuck for $12.5 million has run into a glitch, creating an opportunity for Macy's to grab the site.
Three weeks ago, John Wanamaker said it was turning over the store to Sears. But last Friday, executives from Federated Department Stores were touring the 223,000-square-foot unit with an eye toward converting it to Macy's, sources at the mall said. Sears reportedly negotiated with Wanamaker's on the site, but the mall's landlord has decided to intervene by bidding on the site. Wanamaker's, owned by Woodward & Lothrop, which is reorganizing in Chapter 11, must open up any lease sale to public bidding under bankruptcy law and accept the best offer.
Marc Abrams, of Willkie, Farr & Gallagher, counsel to W&L, said Friday that the landlord, Leonard Marx, plans to bid on the lease at an auction in late February.
Marx was on vacation and unavailable for comment. His attorney, Edward Flint, of Shaw & Licitra, did not return calls Friday. Sears and Macy's officials could not be reached.
In the past, landlords have sought to recover leases from tenants because long-standing leases tend to be below market rates and a new one could boost their income. It's also possible that Marx was unhappy with certain terms of the Sears deal. "Sears was taking the site on an as-is basis," said a source. However, the source noted that Sears is still aggressively pursuing the site and will be in talks with Marx directly, instead of through Wanamaker's.
Wanamaker's officials have denied reports that it will close other sites, but a source said that employees at the Yonkers store have been told to save the going-out-of-business signs for other potential liquidations.
Wanamaker's has been at the Cross Country Center site since 1954. Stern's, a division of Federated along with Macy's, is the other anchor.
A hearing to approve the deal between W&L and Sears has been put off several times and has not been rescheduled.

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