Target agrees sale of Mervyn’s chain
US discounter refocused on core business
US discount retailer Target has agreed the sale of its 257-store Mervyn’s chain to an investment consortium.
The latest $1.65bn cash deal follows the sale of Target’s Marshall Field’s business to May Department Stores Company. The sales are part of a strategy to allow the retailer to focus on ita core discount Target chain, which operates more than 1,200 US stores and competes directly with Wal-Mart.
Mervyn’s, which operates mid-market department stores in 13 US states mainly in the west and south, is being sold to an investment consortium including Sun Capital Partners, Cerberus Capital Management, and , Lubert-Adler/ Klaff and Partners. In addition, Mervyn’s credit card business is being sold to GE Consumer Finance.
Sun Capital has a growing portfolio of retail investments which includes US chains Sam Goody, SunCoast, Media Play, Anchor Blue, Wicke’s Furniture, and Bruegger’s Bagels,
Bob Ulrich, chairman and chief executive officer of Target, said: “We believe that the sale of Mervyn’s as an ongoing business reflects our long-term commitment to create substantial value for our shareholders over time and enhances the opportunity for all of our stakeholders, including our team members, guests and communities, to enjoy continued success for many years.”
Target has also confirmed that the $3.2bn sale of the 62-store Marshall Field’s business has been completed.
