France''s PPR SA to buy United Retail Group Inc
14 September 2007
France''s PPR SA said on Tuesday 11 September that its mail order and online unit Redcats Group would acquire United Retail Group Inc in a deal that values the American women''s plus-size clothing retailer at $198.9 million. PPR is looking to expand into the fast-growing plus-sized women''s clothing market with this move.
Based in Rochelle Park, New Jersey, United operates 483 stores under the Avenue banner, with a total of more than 2 million square feet of selling space, as well as an online store. Redcats will offer $13.70 in cash for each United Retail share, a 23-per cent premium to the 90-day average of United''s share price, and an 82 per cent premium to the closing price on 10 September.
Led by billionaire François-Henri Pinault, PPR has been focusing on faster-growing markets and reducing its dependence on France, where sales growth has been sluggish. Earlier this year, it paid €3.3 billion ($4.6 billion) for German sporting goods maker Puma AG.
In June 2006, it sold one of France''s biggest department store operators, Printemps, for €1.08 billion ($1.5 billion). The United Retail acquisition is PPR''s first acquisition in the US since May 2006, when it paid about $265 million to buy Sportsman''s Guide Inc, a Minnesota-based catalogue and online vendor of hunting and hiking gear.
Nasdaq-listed United Retail posted an operating profit of about $15 million on sales of $462 million for the year ended 3 February. The company''s board has advised investors to accept the Redcats bid, and CEO Raphael Benaroya has agreed to tender his 17.5 per cent stake in the company to the offer.
PPR''s Redcats, formerly La Redoute, is the world''s third-largest catalogue shopping group, with operations in 18 countries. It operates about 100 stores, 60 websites and prints 30 catalogues, including Chadwick''s and Lane Bryant in the US, La Redoute in France, Ellos in Scandinavia and Empire Stores in the UK.
company''s sales stood at about €2.1 billion ($2.9 billion) in the first half
of 2007, with strong results for La Redoute and Sportsman''s Guide, but poor sales
at its children''s and family divisions.