<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended MAY 2, 1998
---------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
----------------- --------------------
Commission file number 333-42935
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BELK, INC.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified In Its Charter)
<TABLE>
<S> <C>
Delaware 56-2058574
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(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
2801 West Tyvola Road, Charlotte, North Carolina 28217-4500
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(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's Telephone Number, including Area Code (704) 357-1000
-----------------------------
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report.
Indicate by check [X] whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days Yes [X] No
------ ------
Number of shares of Class A common stock outstanding as of the close of business
on June 6, 1998: 56,005,817
<PAGE> 2
BELK, INC.
<TABLE>
<CAPTION>
Page
Number
------
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements (unaudited)
Statements of Income for the 2
Three months ended
May 2, 1998 and May 3, 1997
Balance Sheets as of 3
May 2, 1998 and January 31, 1998
Statement of Changes in Shareholders' Equity for the 4
Three months ended
May 2, 1998
Statements of Cash Flows for the 5
Three months ended
May 2, 1998 and May 3, 1997
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial 9
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
BELK, INC.
STATEMENTS OF INCOME
(dollars in thousands)
<TABLE>
<CAPTION>
Predecessor Companies
----------------------------
Three Months Ended
----------------------------
May 2, May 3,
1998 1997
--------- ---------
<S> <C> <C>
Revenues $ 450,276 $ 448,843
Cost of goods sold (including occupancy
and buying expenses) 304,783 305,754
Selling, general and administrative expenses 121,997 121,299
--------- ---------
Income from operations 23,496 21,790
Interest expense, net (8,479) (7,953)
Other income, net 88 456
--------- ---------
Income from continuing operations before income
taxes and equity in earnings of unconsolidated
entities 15,105 14,293
Income taxes 5,870 5,500
--------- ---------
Income from continuing operations before equity in
earnings of unconsolidated entities 9,235 8,793
Equity in earnings of unconsolidated entities, net of
income taxes of $120 and $46 for the three months
ended May 2, 1998 and May 3, 1997, respectively 188 72
--------- ---------
Income from continuing operations 9,423 8,865
Loss from discontinued operations, net of
income tax benefit of $320 -- (501)
--------- ---------
Net income before extraordinary item 9,423 8,364
Extraordinary item - loan prepayment penalty,
net of income tax benefit of $670 (1,004) --
--------- ---------
Net income $ 8,419 $ 8,364
========= =========
</TABLE>
See accompanying notes to financial statements.
Page 2
<PAGE> 4
BELK, INC.
BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
Predecessor
Belk, Inc. Companies
---------- -----------
May 2, January 31,
1998 1998
---------- -----------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 26,436 $ 16,263
Accounts receivable, net 345,618 353,509
Merchandise inventory 491,941 431,169
Prepaid expenses and other current assets 29,747 39,117
---------- ----------
Total current assets 893,742 840,058
Investments in unconsolidated entities -- 38,846
Investment securities 41,427 37,223
Property and equipment, net 471,755 395,771
Prepaid pension costs 91,466 2,250
Intangible assets, net -- 17,620
Other assets 19,165 16,734
---------- ----------
Total assets $1,517,555 $1,348,502
========== ==========
Liabilities, Deferred Income and Shareholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 194,121 $ 191,093
Accrued income taxes 2,365 3,363
Lines of credit and notes payable 143,315 59,323
Current installments of long-term
debt and capital lease obligations 89,037 89,133
Other current liabilities 51,000 --
---------- ----------
Total current liabilities 479,838 342,912
Long-term debt and capital lease obligations,
excluding current installments 176,723 210,449
Deferred compensation and other noncurrent liabilities 112,181 79,374
---------- ----------
Total liabilities 768,742 632,735
---------- ----------
Deferred income 12,202 11,982
---------- ----------
Shareholders' equity:
Common stock 560 70,629
Paid-in capital 583,546 470
Retained earnings 151,690 618,834
Accumulated other comprehensive income 815 13,852
---------- ----------
Total shareholders' equity 736,611 703,785
---------- ----------
Total liabilities, deferred income and shareholders' equity $1,517,555 $1,348,502
========== ==========
</TABLE>
See accompanying notes to financial statements.
Page 3
<PAGE> 5
BELK, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
Accumulated
other
Comprehensive Common Paid-in Retained comprehensive
income Stock capital earnings income Total
------ ----- ------- -------- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Balance at January 31, 1998,
Predecessor companies -- $ 70,629 $ 470 $ 618,834 $ 13,852 $ 703,785
Comprehensive income:
Net income $8,419 -- -- 8,419 -- 8,419
Unrealized gains on investments,
net of income taxes 1,441 -- -- -- 1,441 1,441
------
Comprehensive income $9,860
======
Cash dividends -- -- (8,730) -- (8,730)
Repurchase of stock (50) -- (3,450) -- (3,500)
Acquisition of Belk companies (70,019) 583,076 (463,383) (14,478) 35,196
-------- --------- --------- -------- ---------
Balance at May 2, 1998, Belk, Inc. $ 560 $ 583,546 $ 151,690 $ 815 $ 736,611
======== ========= ========= ======== =========
</TABLE>
See accompanying notes to financial statements.
Page 4
<PAGE> 6
BELK, INC.
STATEMENTS OF CASH FLOWS
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
May 2, May 3,
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,419 $ 8,364
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 13,351 13,132
Gains on sale of property and equipment and investments (132) (305)
Equity in earnings of unconsolidated
entities, net of income taxes (188) (72)
Change in:
Accounts receivable, net 20,335 15,504
Merchandise inventory (44,680) (43,040)
Prepaid expenses and other assets (12,651) (8,922)
Accounts payable and accrued expenses (1,905) 26,320
Other assets and liabilities (6,273) (760)
-------- --------
Net cash provided (used) by operating activities (23,724) 10,221
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (9,144) (17,834)
Cash acquired from business formerly accounted
for on the equity method 11,861 --
Other 56 (405)
-------- --------
Net cash provided (used) by investing activities 2,773 (18,239)
-------- --------
Cash flows from financing activities:
Proceeds from notes payable -- 6,000
Payments on notes payable (8,821) (27,087)
Proceeds from issuance of long-term debt -- 27,507
Principal payments on long-term debt and
capital lease obligations (40,638) (12,257)
Net proceeds from lines of credit 92,813 11,495
Dividends paid (8,730) (8,936)
Repurchase of common stock (3,500) --
-------- --------
Net cash provided (used) by financing activities 31,124 (3,278)
-------- --------
Net increase (decrease) in cash and cash equivalents 10,173 (11,296)
Cash and cash equivalents at beginning of year 16,263 56,115
-------- --------
Cash and cash equivalents at end of year $ 26,436 $ 44,819
======== ========
</TABLE>
(continued)
Page 5
<PAGE> 7
BELK, INC
STATEMENTS OF CASH FLOWS-(Continued)
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
May 2, May 3,
1998 1997
-------- --------
<S> <C> <C>
Supplemental schedule of noncash investing
and financing activities:
Increase in property and equipment and debt
from new capital leases $ 5,016 $ --
Acquisition of net assets of retail companies 35,196 --
</TABLE>
See accompanying notes to financial statements.
Page 6
<PAGE> 8
BELK, INC.
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(1) ACQUISITION AND BASIS OF PRESENTATION
On April 15 and 16, 1998, the shareholders of the 112 companies previously
comprising the Belk Companies (the "Predecessor Companies") voted to approve the
reorganization (the "Reorganization") of the 112 companies into a single
operating entity, Belk, Inc. (the "Company"), pursuant to a Plan and Agreement
of Reorganization, dated November 25, 1997, as amended, among Belk, Inc., Belk
Acquisition Co. and the Belk Companies (the "Reorganization Agreement"). The
accompanying balance sheet at May 2, 1998 reflects the adjustments to merge the
companies with Belk, Inc. pursuant to the Reorganization Agreement. The balance
sheet at January 31, 1998, along with the statements of income for the periods
ended May 2, 1998 and May 3, 1997 have been prepared for purposes of depicting
the combined financial position and results of operations of the Belk Companies,
on a historical cost basis, that participated in the Reorganization.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(2) PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
As discussed in note 1 above, on April 15 and 16, 1998, the shareholders
voted to approve the Reorganization. The following unaudited pro forma condensed
statements of operations are based upon the combined statements of operations of
the Belk Companies, adjusted to give effect to the Reorganization as if it had
occurred at the beginning of each period. The unaudited pro forma condensed
statements of operations reflect the preliminary allocation of the purchase
price as the purchase price allocation has not been finalized.
The Reorganization is reflected in the following unaudited pro forma
condensed statements of operations as a purchase business combination in
accordance with the provisions of Accounting Principles Board Opinion Number 16,
and the Securities and Exchange Commission's Staff Accounting Bulletin Number
97. Belk Enterprises, Inc. is deemed to be the acquiring corporation in the
Reorganization because its shareholders will receive a larger portion of the
voting rights in Belk, Inc. than any other Belk Company. Pro forma basic
earnings per share are computed based on the 56,005,817 common shares of Belk,
Inc. that will be issued in connection with the Reorganization.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
May 2, 1998 May 3, 1997
-----------------------------------------------------
Reported Pro Forma Reported Pro Forma
---------- ----------- ----------- -----------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues $450,276 $466,579 $448,843 $464,297
Income before discontinued operations and
extraordinary item 9,423 9,792 8,865 9,023
Net income 8,419 8,788 8,364 8,522
Basic earnings per share:
Income before discontinued operations and
extraordinary item N/A 0.17 N/A 0.16
Discontinued operations N/A 0.00 N/A (0.01)
Extraordinary item N/A (0.01) N/A 0.00
Net income N/A 0.16 N/A 0.15
</TABLE>
Page 7
<PAGE> 9
BELK, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(dollars in thousands)
(3) Accounting Policies
The condensed financial statements included herein as of May 2, 1998
and for the three months ended May 2, 1998 and May 3, 1997 have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission with respect to Form 10-Q. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The accompanying
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's 1998 10-K Report. In the opinion of
management, all adjustments necessary for a fair presentation of quarterly
operating results are reflected herein and are of a normal, recurring nature.
Due to the seasonal nature of the retail industry, earnings for periods
which exclude the holiday season are not necessarily indicative of the results
that may be expected for the full fiscal year.
(4) Income Taxes
The Company determines its deferred tax provision under the liability
method, whereby deferred tax assets and liabilities are recognized for the
expected tax consequences of temporary differences between the tax bases of
assets and liabilities and their reported amounts using presently enacted tax
rates. As a result of the Reorganization, deferred taxes were revalued and the
resulting change to the underlying assets and liabilities was recorded as a
purchase accounting adjustment.
(5) Other Current Liabilities
The Company has recorded a liability in the amount of $51,000, representing
the estimated amount necessary to repurchase stock from dissenting shareholders
in the Reorganization. This liability is expected to be funded with proceeds
from long-term debt. Shareholders' equity at May 2, 1998 has been adjusted to
reflect the repurchase of the stock.
(6) Effect of New Accounting Standards and Statements
As of February 1, 1998, the Company has adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," which
establishes standards for the reporting and display of comprehensive income and
its components. Adoption of this standard had no material effect on the
Company's financial position, results of operations or cash flows.
The Financial Accounting Standards Board has issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information," which
establishes reporting and disclosure standards for an enterprise's operating
segments and SFAS No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits," which revises employers' disclosures about pension and
other postretirement benefit plans. Both statements are effective for the
Company's fiscal year ending January 31, 1999. Adoption of these standards will
not impact the Company's financial position, results of operations or cash
flows, and any effect will be limited to the form and content of its
disclosures.
(7) Borrowings
In April 1998, the Company repaid a $30.4 million mortgage note with
proceeds from a bridge facility. The loss on extinguishment of the mortgage,
including a $1.0 million, net of tax prepayment penalty is reported as an
extraordinary loss.
(8) Subsequent Event
On June 11, 1998, the Company finalized a $300 million accounts receivable
securitization, borrowed $257 million and used the proceeds to repay the
majority of existing debt. Borrowings under the facility are limited to
approximately 80% of the Company's customer accounts receivable.
Page 8
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations:
Results of Operations
The following table sets forth, for the periods indicated, the
percentage relationship to revenues of certain items in the Company's statements
of income.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------
May 2, May 3,
1998 1997
------------- -------------
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of goods sold 67.7% 68.1%
Selling, general and administrative
expenses 27.1% 27.0%
Income from operations 5.2% 4.9%
Interest expense, net 1.9% 1.8%
Income from continuing operations 2.1% 2.0%
Comparable stores revenues increase 1.6% 1.0%
</TABLE>
Comparison of the 13 Weeks Ended May 2, 1998 and May 3, 1997
Revenues. The Company's revenues for the first quarter of fiscal year
1999 increased 0.3%, or $1.4 million, to $450.3 million from $448.8 million over
the same period in 1998. On a comparable store basis, revenues increased 1.6% in
the quarter. Increases in comparable store revenues were mostly offset by a net
decrease of 11 stores from the first quarter of fiscal year 1998 to the first
quarter of fiscal year 1999.
Cost of Goods Sold. As a percentage of revenues, cost of goods sold
decreased to 67.7% for the first quarter of fiscal year 1999 as compared to
68.1% in the comparable period in fiscal year 1998 as a result of a $1.0 million
decrease in buying costs due to increased efficiencies in the buying
organization and $1.2 million of additional vendor markdown allowances,
partially off-set by an increase in markdowns.
Interest Expense, Net. Interest expense, net increased 6.6%, or $.5
million, to $8.5 million for the first quarter of fiscal year 1999 from $8.0
million for the same period in 1998. The increase resulted primarily from a
14.0% increase in outstanding borrowings off-set by reduced effective interest
rates due to the refinancing of higher rate debt facilities.
Seasonality and Quarterly Fluctuations
The retail business is highly seasonal with approximately one-third of
annual revenues being generated in the fourth quarter, which includes the
Christmas selling season. As a result, a disproportionate amount of the
Company's operating and net income is realized during the fourth quarter and
significant variations can occur when comparing the Company's financial
condition between quarters.
Page 9
<PAGE> 11
Liquidity and Capital Resources
The Company's primary sources of liquidity are cash on hand, cash flow
from operations, and borrowings under debt facilities. The numerous debt
facilities utilized by the 112 Belk Companies participating in the
Reorganization have been assumed by the Company. The Company intends to
consolidate substantially all existing debt facilities with the combination of a
$300 million accounts receivable securitization and a long-term debt facility.
The Company finalized the $300 million accounts receivable securitization on
June 11, 1998, borrowed $257 million and used the proceeds to repay the majority
of existing debt. The accounts receivable securitization limits borrowings under
the facility to approximately 80% of the Company's customer accounts receivable,
places certain restrictions on mergers, consolidations and the sales of the
Company's assets and requires the maintenance of minimum financial ratios. The
Company is in the process of obtaining the long-term debt facility.
The Company has a $50 million unsecured line of credit commitment from
a bank that is available to fund the repurchase of approximately $51 million of
shares of common stock of the Company from dissenting shareholders in connection
with the Reorganization. Any borrowings under the commitment would also be
refinanced with the new facilities described above.
During the first quarter of fiscal year 1999, net cash used by
operations was $23.7 million. This reflects increases in inventories due to
normal seasonal requirements of the retail industry.
Expenditures for property and equipment were $9.1 million for the three
months ended May 2, 1998, compared to $17.8 million in last year's first three
months. In the first quarter of 1999, the Company opened three new stores -- one
in a new market in Canton, GA, another as a relocated store in Smithfield, NC,
and a store in Cayce, SC. Also completed was an expansion and renovation of the
Forest City, NC store and renovations in the Wilmington and Winston-Salem, NC
stores. The Company plans to open five additional new stores, complete
significant renovations to and/or expansions of five existing stores and update
its point-of-sale register systems during the current year, resulting in fiscal
year 1999 annual capital expenditures of approximately $100 million.
In the first quarter of fiscal year 1999, the Company acquired cash of
$11.9 million from the acquisition of the Belk-Simpson retail operations.
Belk-Simpson had historically been accounted for on the equity method.
Net cash provided by financing activities was $31.1 million for the
first quarter of 1999, a result of increased short-term borrowings, compared to
$3.3 million of cash used by financing activities in last year's first quarter.
During the first quarter of fiscal year 1999, the Company entered into a bridge
loan in the amount of $32.4 million to repay a high rate long-term mortgage
debt.
Management of the Company believes that cash flows from operations and
their planned credit facilities will be sufficient to cover working capital
needs, capital expenditures and debt service requirements.
Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Advisory Board issued
Statement of Position (SOP) No. 98-1, "Accounting for Internal Use
Software," which establishes standards for the costs of computer software
developed or obtained for internal use. The Company will implement the standard
in fiscal year 2000. The impact of SOP No. 98-1 on Belk, Inc. operations has not
been determined.
Year 2000 Issues
In January 1996, the Company began converting its computer systems to
be Year 2000 compliant (e.g. to recognize the difference between '99 and '00 as
one year instead of negative 99 years). At May 2, 1998, approximately 60% of the
Company's systems were compliant, with all systems expected to be compliant by
the end of the fiscal year ending January 30, 1999. The total cost of the
project is estimated to be $5.5 million and is being funded through operating
cash flows. The Company is expensing all costs associated with these system
changes. As of May 2, 1998 $3.3 million had been expensed.
The Company is in the process of determining the Year 2000 status of its
principal business partners. Although management believes that the Company will
successfully complete the conversion of its computer systems to be Year 2000
compliant, any problems with such conversion could have a material impact on the
Company's future results of operations.
Page 10
<PAGE> 12
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On April 16, 1998, the sole shareholder of the Company took action by
written consent to approve the transactions contemplated by the Reorganization
Agreement. The sole shareholder of the Company unanimously approved the
Reorganization Agreement and the transactions contemplated thereby. On April 15,
1998 and April 16, 1998, the shareholders of the Belk Companies approved the
Reorganization Agreement by the requisite shareholder vote under the Belk
Companies' respective state law and governing documents. The Belk Companies were
merged with and into the Company pursuant to the Reorganization Agreement on May
2, 1998, immediately prior to the end of the fiscal quarter ended May 2, 1998.
Belk Acquisition Co. was merged with and into Belk-Simpson Company, Greenville,
South Carolina on May 2, 1998, immediately prior to the end of the fiscal
quarter ended May 2, 1998. Upon approval of the Reorganization Agreement, John
M. Belk, Sarah Belk Gambrell, Thomas M. Belk, Jr., H. W. McKay Belk, John R.
Belk, David Belk Cannon, J. Kirk Glenn, Jr., Karl G. Hudson, Jr., John A. Kuhne
and B. Frank Matthews, II were elected to the Board of Directors of the Company.
Mr. John M. Belk is the Chairman of the Board of Directors of the Company.
Item 5. Other Information
One of the Company's directors, David Belk Cannon, died on June 7, 1998.
At this time, the vacancy on the Board of Directors created by Mr. Cannon's
death has not been filled.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description of Exhibits
------ -----------------------
2.00 - Plan and Agreement of Reorganization, dated as of November 25, 1997,
by and among Belk, Inc., Belk Acquisition Co. and the Belk Companies,
as amended (incorporated herein by reference to Exhibit 2.1 to Belk,
Inc.'s Registration Statement on Form S-4, File No. 333-42935).
3.00 - Amended and Restated Certificate of Incorporation of Belk, Inc.
(incorporated herein by reference to Exhibit 3.2 to Belk, Inc.'s
Registration Statement on Form S-4, File No. 333-42935).
3.00 - Amended and Restated Bylaws of Belk, Inc. (incorporated herein by
reference to Exhibit 3.4 to Belk, Inc.'s Registration Statement on Form
S-4, File No. 333-42935).
4.00 - Specimen Class A Stock Certificate (incorporated herein by reference
to Exhibit 4.0 to Belk, Inc.'s Registration Statement on Form S-4, File
No. 333-42935).
4.01 - Specimen Class B Stock Certificate (incorporated herein by reference
to Exhibit 4.1 to Belk, Inc.'s Registration Statement on Form S-4, File
No. 333-42935).
27.00 - Financial Data Schedules
(b) Reports on Form 8-K
None.
Page 11
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BELK, INC.
Dated: June 16, 1998 By: /s/ Ralph A. Pitts
---------------------------------------------
Ralph A. Pitts
Executive Vice President, General Counsel and
Corporate Secretary
(Authorized Officer of the Registrant)
By: /s/ Bill R. Walton
---------------------------------------------
Bill R. Walton
Senior Vice President, Treasurer
and Controller
(Chief Accounting Officer)
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> MAY-02-1998
<CASH> 26,436
<SECURITIES> 41,427
<RECEIVABLES> 345,618
<ALLOWANCES> 0
<INVENTORY> 491,941
<CURRENT-ASSETS> 893,742
<PP&E> 471,755
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,517,555
<CURRENT-LIABILITIES> 479,838
<BONDS> 265,760
0
0
<COMMON> 560
<OTHER-SE> 736,051
<TOTAL-LIABILITY-AND-EQUITY> 1,517,555
<SALES> 450,276
<TOTAL-REVENUES> 450,276
<CGS> 304,783
<TOTAL-COSTS> 304,783
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,479
<INCOME-PRETAX> 15,105
<INCOME-TAX> 5,870
<INCOME-CONTINUING> 9,423
<DISCONTINUED> 0
<EXTRAORDINARY> (1,004)
<CHANGES> 0
<NET-INCOME> 8,419
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>EPS IS NOT APPLICABLE AS THE 10-Q INCOME STATEMENT IS FOR COMBINED COMPANIES
UNDER COMMON CONTROL THAT WERE MERGED ON THE LAST DAY OF THE QUARTER AS
EXPLAINED IN FOOTNOTE 1 OF THE NOTES TO THE COMBINED FINANCIAL STATEMENTS.
</FN>
</TABLE>
