Federated Department Stores Inc. has agreed to sell its Lord & Taylor division to NRDC Equity Partners LLC for $1.195 billion in cash, the Cincinnati, OH-based merchant said yesterday.
Federated, which acquired Lord & Taylor as part of its $11 billion purchase of May Department Stores last year, announced in January that it planned to sell the once-venerated retail chain because it did not fit into its “strategic focus.”
The strategic focus is an ongoing effort to build Bloomingdale’s and Macy’s into national brands.
The sale includes 48 Lord & Taylor stores in New Jersey, New York, Illinois, Massachusetts, Connecticut, Maryland, Virginia, Michigan, Pennsylvania, and the District of Columbia, as well as a distribution center in Wilkes-Barre, PA.
While the Lord & Taylor brand has lost some of its luster in recent years, it owns some prime real estate, which is what the deal is considered to be mostly about. Particularly attractive is Lord & Taylor’s flagship store on Fifth Avenue in midtown New York. NRDC Equity Partners, Purchase, NY, is a partnership between Apollo Real Estate Advisors, L.P. and National Realty & Development Corp.
The transaction is expected to close in the third quarter of 2006.