NEW YORK — Federated Department Stores Inc. said Thursday that it sold four department stores to Target, coming closer to completing its strategy of divesting 80 duplicate locations stemming from its acquisition of May Department Stores last year.
With this agreement, Federated has announced buyers for 62 locations, leaving 18 more to be jettisoned. In the past two weeks, Federated also announced deals to sell two major properties: the Filene’s flagship in Boston to Vornado Realty Trust, and the Strawbridge’s store in Philadelphia to Pennsylvania Real Estate Investment Trust.
Target will purchase two Macy’s sites, in Coronado Center, Albuquerque, N.M., and Westminster Mall, Westminster, Calif.; as well as a Robinsons-May in Glendale Galleria, Glendale, Calif., and a Strawbridge’s in the Springfield Mall, Springfield, Pa. The deal reflects Target’s growing efforts to become more of a player at malls.
Details of the agreement were not disclosed because the amount paid was not considered material to either party, though. Federated said proceeds from this transaction are included in the $400 million to $500 million after-tax total expected from the sale of duplicate stores nationwide, as previously announced.
Federated is moving rapidly in its assimilation of the bulk of the May doors it purchased. It is still seeking to sell its bridal group, which includes the David’s Bridal chain, and last month it sold off Lord & Taylor to NRDC Equity Partners. Aside from divestitures, the merger also entails converting about 400 former May doors to Macy’s. On Sept. 9, the 400 doors will all be called Macy’s and the corporation will launch national advertising. Federated’s sales in 2006 are expected to exceed $27 billion. By purchasing May, the company doubled in size, gained buying clout and moved into certain regions, such as the Midwest and Texas, where before it had a limited presence.
WWD previously reported that Federated was in negotiations to sell units to Target. Federated has also sold 10 stores to Boscov’s, the regional department store based in Reading, Pa., but most of the divested units have been sold to developers, including Westfield Group, which bought 15, The Macerich Co., which took 11, and General Growth Properties and Simon Property Group, which each took nine units.