MAY CO. WILL ACQUIRE 679 SHOE STORES
NEW YORK — The May Department Stores Co. has agreed to buy a total of 679 shoe stores from The Kobacker Co. and The Shoe Works, which should add $350 million in sales to May Co.’s $2 billion Payless ShoeSource chain.
May Co. did not disclose terms of the deal. The company said it will convert 600 of the stores to Payless formats and sell off the rest. Kobacker and The Shoe Works operate stores called Picway, Shoe Works, Gussini and Patrini.
Philip Abbenhaus, an analyst at Stifel Nicolaus, estimated May Co. paid $40 million to $50 million for the stores. “I think it was a real-estate deal, without a premium,” he said. “The only things they’re buying are inventories and leases.”
Todd Slater, analyst at UBS, said, “It should speed up Payless’s growth and create efficiencies more quickly, like advertising and distribution.”
Payless operates 3,829 stores and is on a plan to add about 440 units this year, not including the acquisition.
— Fairchild News Service