Report: Federated, May Hold Preliminary Merger Talk

The Wall Street Journal reported yesterday that Federated Department Stores, Cincinnati, and May Department Stores, St. Louis, have engaged in preliminary discussions regarding a merger.

The Journal also said that a deal is not imminent, and that the companies previously held informal talks that were not productive.

The department store giants produced about $30 billion last year in sales, as Federated posted $15.6 billion and May $14.2 billion, according to the Associated Press.

Carol Sanger, Federated's vice president of corporate affairs, reportedly reiterated her firm's interest in acquiring other retailers.

The AP also reported that retail industry analyst Kurt Barnard considers it “unlikely” that such a merger could happen, stating that federal regulators might have second thoughts about allowing such a merger, which could squeeze competition in the department store business.

Federated is trying to reach an agreement with Business Development Group Acquisitions Inc., Wayzata, MN, regarding the sale of its Fingerhut catalog operation.

May operates eight regional department store divisions using 11 trade names — including Lord & Taylor — and David's Bridal.

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