Campeau to Sell Ann Taylor Chain for $430 Million

TORONTO —  Canadian retailing giant Campeau Corp. said Tuesday that it has agreed to sell its Ann Taylor retail chain for $430 million to a group that includes the management of the women’s upscale clothier.

Toronto-based Campeau announced plans to sell Ann Taylor in June, saying it was getting out of the specialty retailing business. Campeau owns the huge retailing chains Allied Stores Corp. and Federated Department Stores Inc., which it bought for $6.6 billion in April.

The 103-store Ann Taylor chain, which posted $249 million in 1987 sales, will be sold to a company formed by Ann Taylor executives, Merrill Lynch Capital Partners Inc. and former Lord & Taylor Chairman Joseph Brooks, Campeau said.

The group will pay $430 million in cash for the chain, and the deal is expected to close at the end of January. Proceeds of the sale will help Campeau lower its bank debt and acquire more Federated shares from a Campeau affiliate, it said earlier. Campeau said the sale completes the restructuring of its Federated and Allied divisions.

Four Department Stores

Campeau has been selling off large pieces of Federated and Allied, Ann Taylor’s parent company. The Canadian retailer announced the sale of Federated’s Filene’s Basement discount clothing stores in June and agreed to sell Federated’s Foley’s and Filene’s chains to St. Louis-based May Department Stores Co. in May.

Federated still owns Lazarus, Burdine’s, Abraham & Straus,CQ Rich’s and Goldsmith’s department stores, as well as Compton-based Ralphs Grocery Co., which Campeau said earlier it plans to sell.

The Ann Taylor sale leaves Allied with four department store chains: Stern’s, Jordan Marsh, the Bon Marche and Maas Bros. Allied recently agreed to sell its Brooks Bros. clothing chain to British firm Marks & Spencer.

Allied will retain the right to receive certain payments from Ann Taylor licensing arrangements in Japan, and the deal is subject to certain conditions, Campeau said.