NEW YORK — Saks Inc. announced Monday that it was selling its Northern department store group for $1.1 billion in cash to Bon-Ton Stores Inc., bolstering Bon-Ton as a regional player in the Midwest.
Saks' management will hold on to its Saks Fifth Avenue division -- at least for now -- in an effort to turn the business around.
The deal, expected to be completed in the fiscal first quarter of 2006, will create a 280-plus store chain with total sales of $3.5 billion. York, Pa.-based Bon-Ton will add 142 former Saks department stores under the names of Carson Pirie Scott, Bergner's, Boston Store, Younkers and Herberger's to its store portfolio.
Bon-Ton would also assume approximately $85 million of liabilities, including about $35 million in capitalized leases.
The Northern department store group generated revenue of $2.2 billion last year. That's close to double Bon-Ton's sales of $1.3 billion last year. Bon-Ton operates 139 department stores and two furniture stores in 16 states from the Northeast to the Midwest under the Bon-Ton and Elder-Beerman names.