May to buy Marshall Field's for $3.2 billion

ST. LOUIS-Strengthening its position in the Midwest, May Department Stores Co. will acquire the 62-store Marshall Field's department store group from Minneapolis-based Target Corp. for $3.24 billion in cash, the companies announced June 9. The deal is expected to close sometime this fall.

Marshall Field's, which reported revenues of $2.58 billion and generated $107 million in segment earnings in fiscal 2003, has 62 stores primarily in the Chicago, Minneapolis and Detroit metropolitan areas. Locations include its flagship store on Chicago's State Street. Three distribution centers are also part of the deal.

With the addition of Marshall Field's, May will operate 500 department stores in 39 states. With a $1 billion, after tax gain, Target plans to repurchase $3 billion of its common stock, said Doug Scovanner, chief financial officer of Target in a prerecorded message.. The deal also includes nine Mervyn's locations in the Twin Cities area.

Target announced in March that it would review "strategic alternatives" for Marshall Field's and Mervyn's, its San Francisco-based mid-priced chain.

Target said it would continue to evaluate its options for the remaining 257 Mervyn's stores.

The value of the Marshall Fields chain was valued at $1.8 billion, according to The Motley Fool, an investment site. Last year, Marshall Field's operating income dropped more than 21 percent, which prompted Target to ready the department store chain for sale, according to the Fool.

Federated Department Stores, based in Cincinnati, had expressed interest in the upscale department store chain.

May, with headquarters here, operates department stores under the Lord & Taylor, Filene's, Famous Barr and L.S. Ayres banners.

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