The Columbus, Ohio-based Value City said Monday that it has terminated the Aug. 23 letter of intent for Schottenstein Stores Corp. to purchase Filene’s Basement and other Value City subsidiaries for $275 million.
Schottenstein is the privately held firm that controls Value City and American Eagle Outfitters Inc., both public companies. It holds a 54 percent stake in Value City. Jay Schottenstein, chairman and chief executive officer, owns 70 percent of Value City through Schottenstein Stores. Had the sale gone through, the proceeds would have been used to pay down Value City’s existing bank credit facility. Schottenstein’s grandfather, E.L. Schottenstein, founded the private firm in 1917.
George Kolber, Value City’s vice chairman and chief executive officer, said in a statement: “We are pleased that our business units will remain together and we fully expect to be able to refinance our current bank facility and the Schottenstein Store facility in a manner sufficient to sustain current operations and finance planned growth.”
The Schottenstein Stores’ financing is a $100 million subordinated credit facility. Separately last week, John C. Rossler was named president of Value City Department Stores. He succeeds Alan Schlesinger, who will now devote all his time to being president and ceo of the firm’s Filene’s Basement division.
Rossler was president of the company’s Shonac Corp. and DSW Shoe Warehouse subsidiaries. At the same time, Value City promoted Edwin J. Kozlowski, of Shonac-DSW, to executive vice president and chief operating officer of Value City, and Raymond L. Blanton, also of Shonac, to senior vice president and general merchandise manager of Value City. The company operates 118 Value City off-price department stores, 20 Filene’s Basement Stores and 104 better-branded DSW Shoe Warehouse Stores.