US: Bon-Ton set to acquire five locations
Department store operator The Bon-Ton Stores has announced it is entering into a definitive asset agreement with Belk to purchase four Parisian department stores and the rights for the construction of a fifth Parisian store from the company.
Bon-Ton said it anticipates completing the transaction with Belk on 30 October, will continue operating the Parisian stores and, subject to the agreement, will offer employment to store associates.
The retailer will pay US$22m in cash for the assets and assume specific liabilities. The four Parisian locations generated net sales in fiscal 2005 in excess of $90m.
Upon completion of the transaction, Bon-Ton will operate a total of 282 stores in 23 states with estimated annual net sales of $3.4bn, with the transaction expected to be accretive to earnings in the 2007 financial year.
The locations to be acquired are Laurel Park Place, Michigan; Meadowbrook Village, Michigan; Fairfield Commons, Ohio and Circle Centre, Indiana. The fifth location, which is in Partridge Creek, Michigan will begin construction in fiscal 2006 and is scheduled to open in October 2007.
Laurel Park Place and Fairfield Commons are regional malls, Meadowbrook Village and Partridge Creek are lifestyle centres, and Circle Centre is a downtown mall.
"We are extremely pleased with the opportunities that this acquisition affords our company. These Parisian stores fit geographically into our existing markets, strengthen our position in the Midwest and add to our customer base," said Bud Bergren, president and chief executive officer of Bon-Ton.
During a transition period, Belk will provide Bon-Ton with specified support services including information technology, credit services, and other back office support functions for the four Parisian stores.
"At present, we will remain focused on our current business in order to ensure that our customers' needs in all our locations are met through the important holiday shopping season," Bergren said. "We look forward to welcoming the Parisian associates to the Bon-Ton team and integrating their strong base of loyal customers and outstanding reputation for community service which are integral to the success of our company."
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