Federated Department Stores
reversed course and announced Thursday it will sell its Lord & Taylor division after all, claiming the chain doesn't fit its long-term strategy.
"After a thorough review, we have concluded that Lord & Taylor does not fit with our strategic focus for building the Macy's and Bloomingdale's national brands," the company said in a statement. "However, Lord & Taylor is a niche specialty retailer with a great name, many outstanding locations, an experienced management team and a strong customer following that makes it a desirable business."
The department store operator expects the move will reduce its fourth-quarter 2005 earnings from continuing operations by around 10 cents a share. Analysts on Wall Street are expecting the company to report earnings of $2.48 a share, up from the $2.55 a share the company recorded for the same quarter in 2004.
are advising Federated in the divestiture process.
Federated acquired the Lord & Taylor chain when it bought its chief rival, May Department Stores, in a $11 billion deal that closed last year, and the company is currently wrestling with the task of merging the businesses and cutting fat from the conglomerate. Federated had said it planned to keep Lord & Taylor's 55 stores, which had 2004 sales of $1.6 billion.
Federated is expected to announce mass layoffs this year and sell off some real estate assets.
Shares of Federated were recently up $1.07, or 1.5%, $72.70.