MAY ASKS TO KEEP MCCURDY’S PENDING TRIAL ON MONOPOLY
Byline: Rich Wilner
NEW YORK — Less than a month after it was enjoined from purchasing eight McCurdy & Co. department stores on antitrust grounds, May Department Stores Co. has asked a federal judge in Rochester, N.Y., to allow its Kaufmann’s division to keep the stores pending a full trial on the matter.
Judge David G. Larimer, who blocked the deal after finding the prospective purchase would create a monopoly in the Rochester area, ordered May last month to return the stores to McCurdy and for McCurdy’s to return the purchase price to May.
Judge Larimer’s order barring the deal was noteworthy because of his finding that the relative market for Kaufmann’s, McCurdy’s and other similar retailers — as far as women’s apparel and cosmetics were concerned — was the much narrower traditional department store business and did not include specialty stores.
Using Larimer’s narrower formula, Kaufmann’s market share of the relevant market post-purchase would have created a near monopoly of decreased competition and increased prices, the judge found.
In court papers seeking to amend Larimer’s order to give back the stores, May said it has divested five of the eight stores and McCurdy’s has spent much of the undisclosed purchase price. The three remaining stores are currently closed.
May did not say in court papers whether it would keep the stores closed if it were successful in its motion. A spokesman for St. Louis-based May had no comment Thursday on the motion.
As reported, the Rochester federal court antitrust case began Sept. 19 when a Kaufmann rival, Bon-Ton Stores Inc., filed suit, saying the May purchase of the McCurdy stores effectively blocked them out of the market.
“Bon-Ton had been negotiating with McCurdy to purchase those stores when May reached its deal with McCurdy’s,” said Marc Schildkraut, of Howrey & Simon, counsel to York, Pa.-based Bon-Ton. May’s Kaufmann operation already operates stores in each of the four area malls.
In two of the malls, Kaufmann’s plans to operate two sites, in the third it planned to add a Lord & Taylor store, and in the fourth, it has already turned the McCurdy’s site over to the mall developer.
Schildkraut, who successfully argued the preliminary motion to halt the deal, said Thursday that May’s only intent in buying McCurdy’s was to keep competitors like Bon-Ton out of the market.
Bon-Ton is “vigorously opposing” May’s motion to keep the stores pending a full hearing. Attorney General G. Oliver Koppell, who joined Bon-Ton in the suit, is also opposing the motion.
— Fairchild News Service