Saks incorporated is selling off its 47 Younkers stores — including 18 in Iowa — in a package with 95 other stores to a York, Pennsylvania company called Bon-Ton. Saks is selling what’s called the Northern Department Store group for one-point-one billion dollars.
Bon-Ton already operates 139 department stores, and C-E-O Bud Bergren said in a conference call today that this new group of stores will fit right in. He says there are similarities in the two department store companies operating characteristics. He says the customer base, merchandise assortments, store size and target locations are all similar. Bergren says they will integrate all the stores into one system that will save money. He says they expect to realize “cost synergies” by 2006 and reduced expenses by 2008 by integrating the functions of each store group.
Bon-Ton purchased the Elder-Beerman store chain in 2003, and he says the latest acquisition sets up the company to be more competitive overall.
He says the acquisitions provide them the ability to grow quickly in order to leverage their overhead and buying power to compete against larger chains. He says, “The economics of this acquisition will enhance the return to our shareholders.”
Bergren talked briefly about the impact on the employees at Younkers and the other stores involved in the sale. He says both companies have “extremely talented associates and management team” but he says it’s too early to talk about staff-related decisions. He says they’ll work in the months to come on detailed plans for integrating the two companies together. The sale is expected to be completed in early 2006.
The stores to be acquired by Bon-Ton along with the Younkers include 31 Carson Pirie Scott stores located in Illinois and Indiana ; 40 Herberger’s stores located in Colorado, Iowa (1), Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming; 14 Bergner’s stores located in Illinois; and 10 Boston Store locations in Wisconsin.