May Department Stores Co. to acquire David's Bridal Inc. for 2.49 times revenue, The

Weekly Corporate Growth Report, Jul 17, 2000

The Deal: The May Department Stores Company has made an offer to purchase David's Bridal Inc. for $436 million, or about $22.50 a share. After the news of the offer was announced, shares of David's Bridal rose $8.1875, to $19.75, while share of May rose 50 cents, to $24.50. May, which currently has bridal registries at its department stores, agreed in April to form an e-commerce wedding site with WeddingNetwork.com.

Discussion: With nearly 110 stores in 35 states, David's Bridal is the largest retail chain specializing in bridal dresses, with the typical store carrying about 2,600 gowns in sizes from 2 to 26, all available off the rack and at less than $1,000. David's Bridal also sells veils and other bridal acces sories and apparel for other formal occasions. The firm, founded in 1950, sells gowns under its own private labels, as well as the licensed Gloria Vanderbilt and Oleg Cassini names.

The retailer May Department Stores Co. is the No. 2 upscale department store operator in the U.S., behind Federated Department Stores. May has about 400 stores coast-to-coast under 11 names: Lord & Taylor, Foley's, Filene's, Hecht's, Strawbridge's, Robinsons-May, Famous-Barr, L.S. Ayres, Meier & Frank, The Jones Store, and Kaufmann's. It is growing in the heartland, acquiring stores in Missouri and Kansas; it also plans to open its first stores in Nebraska and Iowa. The company primarily sells designer-label apparel, shoes, cosmetics and home furnishings to middle- and uppermiddle income buyers.