Byline: Arnold J. Karr

NEW YORK — May Department Stores Co. extended a marriage proposal to David’s Bridal over the weekend, offering $436 million, or more than $20 a share, for the Conshohocken, Pa.-based specialty chain.
With news of the tender offer, David’s shares shot up 8 3/16 points, or 71 percent, to 19 3/4 on the Nasdaq Monday. It peaked at 20 for the day, setting a new 52-week high. May shares were up 1/2 to 24 1/2 on the New York Stock Exchange.
David’s Bridal is expected to operate as a division of May with Bob Huth continuing as president and chief executive. St. Louis-based May said no change in the status of David’s associates is expected following the acquisition. Officials at David’s and May weren’t available over the holiday to comment on plans for David’s other officers.
Stockholders have approximately 30 days to tender their stock. The acquisition is subject to customary regulatory approval and the satisfaction of certain other conditions, but its consummation would strengthen May’s hold on the lucrative bridal market and give it a fast-growing and profitable property besides.
David’s, formerly known as Phillie Bridal, had 1999 net income of $11.1 million, or 58 cents a diluted share, versus $5.8 million, or 31 cents, in the 1998 fiscal year, an increase of 92.4 percent. Net sales hit $175.2 million and total revenues $188.5 million, more than twice its fiscal 1997 sales of $91.6 million. Overall, revenues rose 42.2 percent last year, but comparable-store sales alone were ahead 18.2 percent.
With ten units already opened this year and another 11 new stores planned for the remainder of 2000, it operates 110 specialty bridal shops, 64 of which are in markets that will be shared with May divisions. Among these are Hecht’s, Strawbridge’s, Foley’s, Robinsons-May, Kaufmann’s, Filene’s, Famous-Barr, L.S. Ayres, the Jones Store, Meier & Frank and ZCMI.
David’s operated 81 stores when it went public through a $104 million initial public offering in May 1999.
In April, when May formed an alliance with WeddingNetwork.com to put its bridal services online, Gene Kahn, May’s president and chief executive, noted that the company had a nationwide registry and gift program in 343 of its 422 department stores.
In a statement Monday, Kahn said, “This is a terrific opportunity to serve the customer’s total wedding experience through May’s department stores registry services, David’s wedding-related apparel and accessories, and the capabilities of WeddingNetwork.com. David’s Bridal enrolls a significant percentage of U.S. brides every year. It will be a significant referral source for our already powerful wedding registry business. David’s robust Internet site will provide a powerful linkage to our online wedding registry business with WeddingNetwork.com, which should be fully implemented by the end of July.”
Kahn also pointed out that David’s has strong links to the Y-Generation customer, described as “a key growth segment for our department stores and… David’s primary customer demographic. The acquisition is a great opportunity to broaden our allegiance with these customers whose weddings are often their first interaction with our department stores’ home areas.”
Huth said the acquisition “underscores the success of our merchandising strategy and David’s unique ability to satisfy the needs of the bride and her wedding party. Moreover, merging with May Co. is a tremendous partnership opportunity. The synergies between our two organizations are substantial. This marriage between the two companies is a powerful combination that will extend the breadth of David’s service and merchandise offerings to the bride.”
May’s Kahn also noted the “counter-seasonal” nature of David’s business, “with a higher portion of its sales generated during the spring compared with the fall for department stores.”
David’s fiscal year currently corresponds to the calendar year, and since 1997, its sales have peaked in the first quarter, ending in March, and been at their lowest level in the fourth quarter, ending in December. Last year, it registered 30.1 percent of its revenues in the first quarter versus 26.4 percent in the second, 25.1 percent in the third and only 18.4 percent in the fourth and final period.

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