The St. Louis-based department store reported Monday that it has acquired a 19.5 percent stake in The Knot Inc. for $5 million, and will institute a new strategic marketing alliance with the online wedding planning site. May Co. also will have representation on The Knot’s board of directors.
“The strategic implications of this alliance are very powerful,” said May Co. chief executive officer Gene Kahn in a statement. “Demographics show that the $70 billion bridal industry is ready for significant growth. This alliance further supports our quest for the younger customer and gives us yet another opportunity to build important synergies with our department stores and introduce our home merchandise to a highly targeted audience of new customers.”
Shares of The Knot moved up 30 cents, adding two-thirds to their value, to close at 75 cents in over-the-counter trading on Monday. May shares were up $1.01, or 2.9 percent, to close at $36.45 on the New York Stock Exchange.
The Knot deal is May Co.’s fourth expansion into the bridal business since August 2000, when it bought David’s Bridal for $436 million. In December, the company purchased After Hours Formalwear Inc., the nation’s largest tuxedo rental and sales retailer. And in February, May Co. bought upscale bridal gown retailer Priscilla of Boston for an undisclosed amount of cash.
Christine Kilton-Augustine, an analyst with ABN Amro Inc., agreed with the wisdom of May Co.’s emphasis on capturing the next generation of consumers.
“If you look at who’s shopping at department stores, it’s the baby boomers,” Kilton-Augustine said. “It’s very important to lure younger customers into the stores and this is a good move as part of an overall strategy to attract younger customers.”
Under terms of the agreement, May Co. and The Knot will implement a multi-platform marketing campaign to promote May Co.’s department stores that offer wedding registry services online and in stores. May Co. stores with wedding registry services — including Hecht’s, Foley’s, Filene’s, Kaufmann’s and L.S. Ayres, among others — will be promoted to Knot’s 2.3 million registered users through online advertising, direct mail, e-mail and advertisements in Knot’s publications.
May Co. currently operates 440 stores under nameplates including Lord & Taylor and Famous-Barr, as well as 150 David’s Bridal, 240 After Hours and 10 Priscilla’s stores.