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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
May 24, 1996
THE MAY DEPARTMENT STORES COMPANY
(Exact name of Registrant as specified in its charter)
New York I-79 43-0398035
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
611 Olive Street, St. Louis, Missouri 63101
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(314) 342-6300
Page 1<PAGE>
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Item 5. Other Events.
On May 24, 1996, the state of incorporation of Registrant
was changed from New York to Delaware by means of a statutory
share exchange. Attached as Exhibit 99-1 is a press release
announcing that the Registrant's shareowners approved the
reincorporation at the annual meeting of shareowners held on May
24, 1996.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following documents are filed as Exhibits.
Sequential
Numbering
System
Exhibit No. Exhibit Page Number
99-1 Press Release, dated May 24, 1996 5
99-2 Press Release, dated May 13, 1996 8
Page 2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
THE MAY DEPARTMENT STORES COMPANY
Dated: May 29, 1996 By: /s/ Richard A. Brickson
Richard A. Brickson
Secretary and Senior Counsel
Page 3
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INDEX TO EXHIBITS
Sequential
Numbering
System
Exhibit No. Exhibit Page Number
99-1 Press Release, dated May 24, 1996 5
99-2 Press Release, dated May 13, 1996 8
Page 4
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THE MAY DEPARTMENT STORES COMPANY ANNOUNCES
AGGRESSIVE $4 BILLION, FIVE-YEAR EXPANSION PLAN
TO OPEN 125 NEW DEPARTMENT STORES, REMODEL 70 STORES,
AND IMPROVE DISTRIBUTION CENTERS, EQUIPMENT, AND SYSTEMS
ST. LOUIS, May 24, 1996 -- The May Department Stores Company
told shareowners at its annual meeting today that its five-year
expansion plan is the most aggressive in the company's history,
reflecting the confidence management has in May Company and in
the future of department stores. May will invest almost $4
billion over the next five years, including more than $2 billion
for 125 new department stores, adding more than 22 million square
feet of selling space. The five-year plan includes $800 million
for major expansions and remodels in 70 department stores, and
for modernizing distribution centers and equipment and the
systems that help run the facilities. In 1996, May will open 29
new stores, for a total of 363 department stores by year-end.
In his remarks to shareowners, Chairman and Chief Executive
Officer David C. Farrell said May has made a number of strategic
moves over the last 24 months. With the spin-off of Payless
ShoeSource, "May is now totally focused on operating its
top-quality department store companies. The Woodward & Lothrop,
Wanamaker, and Strawbridge & Clothier acquisitions represent very
dynamic, strategic plays for May. Our sound moves have solidified
our positions in Washington, D.C., Baltimore, and Philadelphia,
and have given us access to new markets such as Reading,
Allentown and Wilmington."
The Woodward & Lothrop and Wanamaker acquisition accounted
for 14 of the record 37 new stores May opened in 1995. Of the 29
new stores planned for 1996, 13 are Strawbridge & Clothier
locations in Philadelphia. Two of the 1996 new stores opened this
spring; the other 27 will open before the holiday season. The
1996 plan includes significant remodeling to 14 stores and
expansions to seven of those stores. The 1996 investment,
including new stores, remodels, expansions, systems and
cost-saving measures, totals more than $750 million.
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Mr. Farrell called the record first quarter 1996 results
"encouraging," with a 12.5% earnings per share increase over
1995's first quarter. "1996 will be a challenging year," he said.
"As we look to the fourth quarter, there are five fewer days
between Thanksgiving and Christmas, and the shift in the calendar
due to the 53rd week creates additional sales jeopardy. An
election year is always a wild card. We understand the challenge,
and are working even harder to make sure the fourth quarter is as
successful as possible."
Mr. Farrell said, "Achieving top-flight store-for-store
growth is May's number one priority. In today's competitive
environment, this requires that we do a lot of things right. We
are committed to continuous improvement on many fronts:
* "May constantly strives to provide the best possible values
to our customers, by working to buy better and smarter.
* "We ardently manage and control our costs. We are committed
to being one of the best cost operators in the retail
industry.
* "We do everything we can to provide a friendly and speedy
shopping experience. The customer wants to get in and out
quickly, and we strive to accommodate this.
* "We are focusing on helping managers provide more support
for sales associates on the selling floor.
* "We strive to make our stores visually more exciting and fun
through the use of graphics, special fixturing, innovative
displays, and most importantly, interesting merchandise.
* "We continue to expand assortments, increase our emphasis on
stepped-up merchandise, and are always on the lookout for
new merchandise classifications that can be added.
* "We continue to pursue high quality vendors and the major
introduction of new product.
* "We place a very high premium on operating with more agility
and speed in response to trends and key volume items,
largely by leveraging our considerable central merchandising
capabilities and the improved vendor and store
communications these capabilities provide."
* " We are building on the success of our powerful private
label program.
* "We seek out proven technologies to help manage our
operations as effectively and as efficiently as possible.
* "We are striving to enhance our effectiveness as a more
powerful holiday and gift store."
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Mr. Farrell also discussed May's organizational strengths.
"In retailing, in many cases, execution is even more important
than strategy," he said. "Execution is heavily dependent upon the
quality and experience of the people in the organization. While
we can never have enough good people, I am very pleased that so
many of our recent top executive promotions, both at the
corporate and operating company level, have been filled by people
from within May."
In closing, Mr. Farrell expressed optimism about May's
future. "Our department store companies have dominant positions
in most of the markets where they compete. We operate powerful
retail franchises, with each possessing the best-recognized names
in their markets and a long history and tradition of providing
top quality value and service. Going forward, we are totally
focused: on operating our top quality department stores; on
generating top-flight store-for-store growth; on aggressive new
store expansion; and on making 1996 our 22nd consecutive year of
record sales and earnings per share."
Seven Board of Directors' members were re-elected: Richard
L. Battram, executive vice chairman of May; David C. Farrell,
chairman and chief executive officer of May; Eugene S. Kahn, vice
chairman of May; Andrall E. Pearson, general partner in Clayton,
Dubilier and Rice and chairman of the board of Kraft Foodservice,
Inc.; Robert D. Storey, partner in the law firm of Thompson, Hine
& Flory; Anthony J. Torcasio, president and chief executive
officer of May Merchandising Company; and Edward E. Whitacre,
Jr., chairman of the board and chief executive officer of SBC
Communications, Inc.
Other board members whose terms did not expire are: Helene
L. Kaplan, of counsel to the law firm of Skadden, Arps, Slate,
Meagher & Flom; Jerome T. Loeb, president of May; Edward H.
Meyer, chairman of the board, president and chief executive
officer of Grey Advertising, Inc.; Russell E. Palmer, chairman
and chief executive officer of The Palmer Group; Michael R.
Quinlan, chairman and chief executive officer of McDonald's
Corporation; William P. Stiritz, chairman of the board and chief
executive officer of Ralston Purina Company; and Murray L.
Weidenbaum, chairman of the Center for the Study of American
Business and Mallinckrodt Distinguished University Professor at
Washington University.
Shareowners also ratified the appointment of Arthur Andersen
& Co. as independent auditors and approved the change in the
company's state of incorporation from New York to Delaware. A
shareowner proposal concerning a classified board did not pass.
The May Department Stores Company is one of the largest
retailers in the United States. May operates 347 department
stores in 30 states and the District of Columbia, with annual
sales of more than $10.5 billion.
# # #
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THE MAY DEPARTMENT STORES COMPANY REPORTS
RECORD RESULTS FOR FIRST QUARTER OF FISCAL 1996:
EARNINGS PER SHARE INCREASE 12.5%; SALES INCREASE 13.9%
ST. LOUIS, May 13, 1996 -- The May Department Stores Company
today reported record earnings per share, net earnings and sales
for the first quarter of fiscal 1996.
For the 13 weeks ending May 4, 1996, fully diluted earnings
per share from continuing operations were $.36, a 12.5% increase
over $.32 in 1995. First quarter 1996 net earnings from
continuing operations were $98 million, compared with $87 million
a year ago.
Sales for the first quarter of fiscal 1996 were $2.42
billion, up 13.9% over $2.13 billion during 1995.
Comparable-store sales for the 13 weeks in 1996 increased 6.7%
versus the similar 1995 period.
During the quarter, May opened two new department stores:
one Robinsons-May store at Sunset Galleria in Henderson, Nev.,
and one Foley's store at First Colony Town Center in Sugarland,
Texas. An additional 14 new department stores are planned for the
balance of the year: five Lord & Taylor stores; one Hecht's
store; three Foley's stores; one Kaufmann's store; two Filene's
stores; and two Famous-Barr stores, one of which will be operated
as L.S. Ayres.
May also announced during the quarter that it signed a
definitive agreement to purchase 13 Strawbridge & Clothier stores
in the greater Philadelphia area. Upon completion of the
transaction, anticipated in July 1996, May will operate 24 stores
in the greater Philadelphia area: 20 stores under the trade name
Strawbridge's as part of Hecht's, and four Lord & Taylor stores.
On May 4, May completed the tax-free distribution to
shareowners of shares in Payless ShoeSource, Inc., a self-service
family shoe store company.
The May Department Stores Company operates 347 department
stores in 30 states and the District of Columbia.
# # #
(CONDENSED CONSOLIDATED RESULTS OF OPERATIONS ON FOLLOWING PAGES)
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THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)
13 Weeks Ended
(Millions, except May 4, 1996 April 29, 1995
per share) % to % to
$ Revenues $ Revenues
Net Retail Sales $ 2,421 $ 2,125
Revenues $ 2,511 $ 2,218
Cost of sales 1,755 69.9% 1,543 69.6%
Selling, general and
administrative expenses 528 21.1 470 21.2
Interest expense, net 64 2.5 58 2.6
Earnings from continuing
operations before income
taxes 164 6.5 147 6.6
Provision for income taxes 66 40.5* 60 40.7*
Net Earnings from:
Continuing operations $ 98 3.9% $ 87 3.9%
Discontinued operation $ 11 $ 27
Net Earnings $ 109 $ 114
Fully Diluted Earnings per
Share from:
Continuing operations $ .36 $ .32
Discontinued operation $ .05 $ .10
Fully Diluted Earnings per
Share $ .41 $ .42
Dividends Paid per Common
Share $ .28-1/2 $ .26
Fully Diluted Average Shares
and Equivalents 265.8 264.5
* Percent represents effective income tax rate
NET RETAIL SALES - PERCENT INCREASE VERSUS LAST YEAR
Net retail sales represent the sales of stores operating at the
end of the latest period. They exclude finance charge revenues
and the sales of stores which have been closed and not replaced.
Store-for-store sales represent sales of those stores open during
both periods.
Total Store-for-Store
13 Weeks Ended May 4, 1996 13.9% 6.7%
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THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
Interim Results. The unaudited condensed consolidated results of
operations have been prepared in accordance with the company's
accounting policies as described in the 1995 Annual Report to
Shareowners and should be read in conjunction with that report.
In the opinion of management, this information is fairly
presented and all adjustments (consisting only of normal
recurring adjustments) necessary for a fair statement of the
results for the interim periods have been included; however,
certain items are included in this statement based on estimates
for the entire year. Also, operating results of periods which
exclude the Christmas season may not be indicative of the
operating results that may be expected for the full fiscal year.
Inventories. Department store merchandise inventories are stated
on the LIFO (last-in, first-out) cost basis. The LIFO provision
for the first quarter was $8 million in 1996 and 1995.
Discontinued Operation. In January 1996, the company announced
its intention to spin off Payless ShoeSource, Inc. ("Payless"),
its chain of self-service family shoe stores. The spin-off was
completed effective May 4, 1996, as a tax-free distribution to
shareowners. The company's financial statements presented herein
reflect Payless as a discontinued operation.
As discussed in the 1995 Annual Report to Shareowners, and in
accordance with generally accepted accounting principles, Payless
1996 pre-tax earnings were recorded in 1995 to the extent of
spin-off costs and the Payless operating loss from January 17,
1996 through fiscal 1995 year-end. As a result, $21 million of
1996 Payless pre-tax earnings is not reported in the first
quarter net earnings from discontinued operation. In addition,
during the 1996 first quarter, Payless recorded a $6.1 million
pre-tax charge relating to the spin-off. The following recaps the
first quarter Payless results:
1996 1995
Fully Fully
Diluted Diluted
Net Earnings Net Earnings
(Millions, except per share)Earnings per Share Earnings per Share
Payless operating results $28 $.11 $27 $.10
1996 earnings recorded in
1995 (13) (.04) - -
First quarter 1996 charge
relating to the spin-off (4) (.02) - -
Discontinued operation $11 $.05 $27 $.10
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Acquisition. On April 4, 1996, the company announced it will
acquire 13 Strawbridge & Clothier stores in the greater
Philadelphia area in a transaction expected to close in July
1996, subject to customary conditions, including approval by
Strawbridge and Clothier ("Strawbridge") shareowners and other
regulatory approvals. As required by the purchase agreement with
Strawbridge, the company will deliver, at the July closing,
subject to later adjustment, 4.2 million shares of May common
stock and will assume approximately $280 million of debt and
certain other liabilities in exchange for the Strawbridge
department store assets. The company has also agreed to issue
additional May common stock in exchange for any cash proceeds
from Strawbridge's divestiture of its Clover discount division,
net of certain transaction expenses. The asset acquisition will
be accounted for as a purchase.
Trailing Years' Results. Operating results for the trailing years
were as follows (millions, except per share):
52 Weeks Ended
May 4, 1996 April 29, 1995
Net retail sales $ 10,896 $ 9,866
Revenues $ 11,245 $ 10,220
Net earnings $ 711 $ 660
Fully diluted earnings $ 2.65 $ 2.47
per share
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