Investors got a case of shopping madness today over shares of May Department Stores
Of course I've heard the adage "buy on the rumor, sell on the news." However, I rarely have much patience for stock movements that are fueled by rumors, and Fools know this is a short-term mentality. Meanwhile, some of the wind might be taken out of investors' sails by noting that over the years, Federated has made similar overtures to May, which, obviously, have never amounted to anything thus far.
At any rate, the two companies would, of course, own a plethora of marquee names and mall-based anchors. Well-known stores run by the two entities include Lord & Taylor, Bloomingdale's, Macy's, Hecht's, Strawbridge's, David's Bridal, Filene's, and Marshall Field's. Among the economic selling points in such a merger include the obvious cost efficiencies as well as greater leverage in bartering with suppliers.
As much as this might seem to be an ideal coupling between two powerful department store names, I hardly find the concept so tempting. It's no secret that middle-of-the-road department store retailers are feeling pressured by other types of stores that attract today's shoppers. Extremes differentiate department stores these days with Wal-Mart
Meanwhile, many specialty retailers -- Chico's
As much as the rumor propped up May's stock price today, I can't help but wonder about what appears to be a bland outlook for retailers that occupy the middle ground between discount and luxury goods (not to mention the fact that this is still simply a rumor). Rumor mills are best for keeping up with the latest on Brad and Jennifer, not shopping for stocks.
Whether you shop at Macy's or Chico's, Target or Saks, you can make some fashion statements on our What to Wear? board.
Alyce Lomax does not own shares of any of the companies mentioned.