Federated sells 15 department stores to Westfield Group

17 Feb '06

2 min read

Premier retailer Federated Department Stores Inc has signed agreements for The Westfield Group to acquire 15 mall department store locations from Federated. Of those, 13 are duplicate locations Federated has previously announced for divestiture as a result of its acquisition of The May Department Stores Company.

The other two locations are Macy's University Town Center in La Jolla, CA, and Macy's Main Place in Santa Ana, CA. Federated expects to lease back and operate these stores as Macy's, pending redevelopment of the malls and construction of new stores.

One agreement with Westfield involves a tax-deferred like kind exchange of 12 stores for 12 department store properties currently owned by Westfield and leased to Federated (acquired by Federated in the May Company acquisition). The remaining three stores will be sold to Westfield for $18.5 million in cash via a separate purchase and sale agreement.

Federated stated proceeds from this transaction will be included in the $400 million to $500 million of after-tax proceeds expected from the sale of duplicate stores nationwide, as previously announced.

Clearance sales at all stores being acquired by Westfield (except for West Covina) began on January 29th 2006. Macy's will continue to serve customers in these malls, including in locations where May Company nameplates will be converted to Macy's.

The transactions with Westfield are expected to be completed in the second quarter of 2006.

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