NEW YORK — It appears Federated will get to keep most of the Macy’s stores in New York — including the Herald Square flagship.
Federated Department Stores and the recently outvoted New York Attorney General, G. Oliver Koppell, who threatened an antitrust suit prior to Tuesday’s primary election, are in a sensitive negotiating stage, but sources close to the talks said onThursday that the two sides appear close to an agreement that would have Federated selling off most of the Abraham & Straus stores and one or two Macy locations.
Koppell had insisted that Federated unload all Macy units in the New York area as a condition for his approving the merger of the two retail giants.
Two days after Koppell saw his reelection bid fizzle by finishing a close second in the Democratic primary, talk around the negotiating table was centered exclusively on reaching an agreement.
A lawsuit, while still possible, is unlikely.
The Democratic primary victor — and Koppell’s potential successor — Judge Karen Burstein, has disagreed with Koppell’s actions, which she claimed put Macy’s future in doubt.
Burstein, through a spokesman, said that while she “obviously doesn’t have all the detailed information to make an informed judgment, she considers Macy’s one of New York City’s gems, symbolically — with the parade and fireworks — and financially. She thinks Macy’s should be protected and that Macy’s jobs should be protected.”
Dennis Vacco, the Republican candidate for attorney general, did not return phone calls.
Federated and an aide to Koppell said Thursday they were making “substantial progress” in their talks about antitrust concerns raised by Koppell over the merger and hoped the matter would be settled “sooner rather than later.”
Neither Federated nor Koppell’s office would comment.
While it could not be determined if Koppell’s primary election loss had any effect on the negotiations, one person close to the talks said Koppell had favored a settlement over a lawsuit all along.
Koppell, the state’s top antitrust cop, was still ready to go to court should the two-week-old negotiations break down, the source said, but “preferred not to dwell on the lawsuit.”
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“We hope to finish up the negotiations in short order,” the source said.
Federated would love to come to an agreement with Koppell prior to Sept. 29, when the retailer is scheduled to appear in bankruptcy court, here, to have its disclosure statement approved by Judge Burton R. Lifland.
The disclosure statement, which will include some late September filings detailing store consolidations and layoffs, would have to include a few question marks regarding store closings if the negotiations with Koppell are still ongoing at that point.
Koppell announced his objections to the Federated-Macy merger on Aug. 23, saying the combination of the two stores would create a retail monopoly in the New York City metropolitan area. He demanded Federated sell off all 12 area Macy stores — including the flagship unit.
At the time, Koppell said he would file a lawsuit to force the sale of the Macy stores if an agreement could not be reached. His political rivals accused him of headline grabbing.
Koppell had originally given Federated until Aug. 30 to start the negotiations and then, according to a source close to the talks, said he would revisit a plan for filing a lawsuit if progress were not being made by Sept. 14.
On Thursday, a source close to Koppell said Sept. 14 was not a “drop dead” date on which Koppell would file suit but merely a holding date by which to judge progress in the talks.
While the exact terms of the agreement between Koppell and Federated have not yet been settled, it appeared Thursday that it would more closely mirror the 1988 agreement between Macy and then-Attorney General Robert Abrams.
At that time, with Macy’s hot on the takeover trail of Federated, Macy’s agreed to sell 11 A&S stores to avoid Abrams’s opposition to the takeover.
— Fairchild News Service