ZCMI has signed a 52-million-dollar merger agreement with the St. Louis-based May Department Stores, both companies announced Friday.
The deal ends ZCMI's 131-year relationship with the Mormon Church but also gives the 14-store chain hope that several years of losses will be halted.
There did exist a few terms under the ZCMI - May company merger. Under the agreement ZCMI will keep its name during a transitional period not to exceed two years and the downtown Salt Lake City store will remain closed on Sundays as long as it carries the ZCMI name.
John Semone an Employee of ZCMI says the merger is somewhat of a comfort.
"I'm very relieved right now knowing something solid is going on."
The Utah based store has struggled in recent years, losing $8.5 million for the year that ended Jan. 30. It lost an additional $3.5 million for this year's first quarter.
Kurt Barnard, president of Barnard's Retail Trend Report had hoped to turn the company around with lay-offs and a few departmental closings.
May Department Stores Co. reported sales of $13.1 billion last year. It operates 402 department stores in 33 stores, including Filene's in New England, Hecht's in the mid-Atlantic states and The Jones Store in the Kansas City area.
Barnard says the transition shouldn't be too shocking.
"ZCMI offers middle-of-the-road type of merchandise, and that is precisely the type of company that the May company is. Nothing off the wall, nothing crazy. They are fashionable."
Anthony Nokes an employee feels excited by the merger.
"It's a good possibility they're going to be bringing some good opportunities that ZCMI hasn't been able to offer."
ZCMI, with about 4,000 employees, calls itself the nation's first department store after being founded in 1868 at the suggestion of Mormon leader Brigham Young. The company's initials originally stood for Zion's Cooperative Mercantile Institution.
ZCMI will keep its name during a transitional period but eventually will change its name to Meier & Frank, a May property with eight stores in Oregon and Washington.
ZCMI Chairman Richard Madsen called the deal bittersweet.
"We're starting our 132nd year today," he said.
The sale is expected to be completed by January but needs government approval, Madsen said.
Additional Links:
Click Here for what the May Company has to say about the merger.
