Federated Department Stores Taking $17 Million Charge
DALLAS (AP) _ Federated Department Stores today said it is merging two of its Texas-based chains, and that the action will result in an estimated $17 million after-tax charge in the fourth quarter.
Dallas-based Sanger Harris department stores and Houston-based Foley’s stores will be merged into one operation based in Houston, the Cincinnati, Ohio-based parent company said.
The consolidation is effective immediately, Federated said.
All 37 locations, in Texas, Oklahoma, Arizona and New Mexico, will continue to operate, but under the Foley’s name.
The new Foley’s division will have combined sales of about $1.1 billion, making it Federated’s largest-volume department store division.
The $17 million one-time charge against earnings includes expenses related to the consoliation of Foley’s systems into the Atlanta-based Southeast Regional Data Center, Federated said.
Lasker M. Meyer, currently Foley’s chairman and chief executive officer, will head the new division.
Federated said John D. Miller, Sanger’s chairman, ″will play an instrumental role in effecting the division restructuring,″ and will take a management position within Federated.
The company said that although the administrative offices of both divisions will be consolidated, the operations and personnel of individual stores will not be effected by the merger.
″By joining forces in a consolidated, centralized operation, the new division will be able to recognize enhanced economies and operating efficiencies that we believe will lead to improved customer service, merchandise value and overall performance,″ said Donald J. Stone, vice president of Federated.
Stone said the merger will result in a reduced cost structure for the new divisional operation.
Howard Goldfeder, chairman and chief executive officer of Federated, said the merger is the final step of a divisional consolidation program begun five years ago.