TRIO IN BID FOR BRADLEES SITES
Byline: Vicki M. Young / With contributions from Arnold J. Karr
NEW YORK — Bradlees’ bankruptcy will add up to an increased retail presence for Kohl’s, Wal-Mart and Home Depot in the Northeast if a joint agreement among the three retailers receives court blessing.
The three entered into an agreement with an affiliate of Stop & Shop Supermarket Co. to jointly purchase the rights to 35 Bradlees stores in the region. Kohl’s, the fast-growing department store group based in Menomonee Falls, Wisc., would acquire 12 stores in the Boston market, accelerating its penetration in New England, and three stores in New Jersey, a market it entered last year. The remaining 20 stores would be divided between Home Depot and Wal-Mart. Although details of the breakdown weren’t available at press time, Wal-Mart said in a published report that it had its eyes on 13 of the units.
The aggregate purchase price for the leases is said to be $115 million, but it isn’t known how the price would be divided among the involved retail parties. Consummation of the deal is subject to approval of the U.S Bankruptcy Court for the Southern district of New York, competitive offers and other conditions but is expected within 90 days.
Bradlees’ was one of two retail bankruptcies to come in the final days of 2000 and touch off a minor retail land rush among expansion-oriented competitors. Bradless filed Chapter 11 for the second time in its history on Dec. 26. Montgomery Ward filed Chapter 11, also with the intent of ceasing all operations, two days later. Bradlees’ first bankruptcy was filed in 1995 and exited in 1999.
Court papers dated Feb. 16 said the lease assignments are subject to a court auction to be held Feb. 27 at the law offices of White & Case here. The bid agreement, with details of the breakdown of plans for the unit, is one of a number of documents currently blocked from public access.
Wal-Mart confirmed plans to occupy the former Bradlees units as it announced its financial results for the fourth quarter and fiscal year Tuesday.
In a detailed statement, Kohl’s said it would use funds currently available to acquire the sites and that it expects to reopen the stores in their remodeled Kohl’s format in spring 2002. It noted that it planned to open 18 stores in March, including 15 in the Atlanta market, a new entry for the company. Sixteen stores are planned to be opened in April, and between 21 and 26 are slated to launch in the fall.
Currently, Kohl’s operates 320 stores in 26 states. Its entry in the Northeast last year was facilitated by the 1999 liquidation of Caldor. Kohl’s picked up 33 Caldor leases and Wal-Mart acquired 14 following the discounter’s decision to close its doors.
At the time of its bankruptcy filing, Bradlees operated 105 stores in seven states: 35 in Massachusetts, 30 in New Jersey, 17 in Connecticut, eight in New Hampshire, seven each in New York and Pennsylvania and one in Maine. The discounter’s headquarters are in Braintree, Mass.
Stop & Shop, Bradlees’ former corporate parent, was the sole bidder for Bradlees’ stores, headquarters and distribution center at a January bankruptcy hearing. A federal judge approved the sale of the assets for $150 million earlier this month. Following the auction late this month. Bradlees and Stop & Shop would split any proceeds in excess of the $150 million paid by Stop & Shop to Bradlees.