US department store business Bon-Ton Stores is homing in on ailing peer Elder-Beerman with a proposed US$80 million (£49.7 million) deal that would create a 140-store force in the depressed sector.
The US$7 (£4.30) per-share bid announced last week trumps a US$6 (£3.73) offer already on the table from investment vehicle Wright Holdings. Bon-Ton is now conducting due diligence and believes it can seal the deal by September.
Discounters such as Target and Kohl's continue to take market share from department stores by appealing to price-conscious customers. The biggest upscale player, Federated Department Stores, has posted a run of negative same-store sales this year, while peer May decided to close 32 Lord & Taylor outlets recently.
According to consultancy Retail Forward's report US Retail Outlook to 2007, the sales malaise will continue.
An annual downturn of 1.1 per cent is forecast.
'The long-term movement of consumers to mass merchants has accelerated,' said the report. 'The continued strain on profit margins should increase the pressure to close stores, consolidate or consider bankruptcy.'
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