CHARGEBACK CASE: Nick DeLeo, who was chief executive officer of Royal Apparel Group in Los Angeles, wants to be part of a pending class-action lawsuit against Federated Department Stores Inc. The company alleges that it went bankrupt partly as a result of accusations in the lawsuit. Another vendor, identified as the Carole Little/Chorus Line bankruptcy estate, filed the suit in December 2003 in New York State Supreme Court, saying that Federated had assessed chargebacks on its goods shipped since December 1999 without providing proper notification or any warnings. Federated moved to dismiss the suit, arguing that the contracts allowed it to take the discounts. A judge denied Federated’s motion on December 2004.
CHARMING BUYS CROSSTOWN: Charming Shoppes Inc. has agreed to buy Crosstown Traders Inc., a direct marketer of women’s apparel, footwear and specialty gifts, from J.P. Morgan Partners, the private equity arm of J.P. Morgan Chase & Co. Charming will pay about $218 million in cash for Crosstown Traders, plus the assumption of debt. Charming also is negotiating with lenders for a new credit facility in the amount of $375 million for a period of five years to provide additional liquidity on improved terms compared with the current $300 million facility, which expires August 2008. Crosstown Traders operates 11 catalogue titles, with 2004 revenues of about $460 million. The deal will provide infrastructure to support Charming’s plan to launch a Lane Bryant catalogue.