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Charming Shoppes and Collective Brands are acquired


New York -- The retail industry is still assessing the impact of two major deals that occurred within 24 hours of each other. On Tuesday, May, 1, shoe manufacturer Wolverine Worldwide Inc. and equity firms Blum Capital Partners and Golden Gate Capital agreed to acquire footwear giant Collective Brands Inc., operator of Payless Shoe Source, in a deal valued at $2 billion, including assumption of debt. And on Wednesday, May 2, Ascena Retail Group said it will acquire Charming Shoppes Inc., parent company of Lane Bryant, for about $890 million.

Here are more details:

Collective Brands: Under the terms of the Collective Brands transaction, Blum Capital and Golden Gate will jointly acquire the operations of Payless ShoeSource and Collective's international-licensing arm. Those units had $2.4 billion in revenue in the latest fiscal year and operated more than 4,300 stores, globally.

Wolverine will acquire Collective Brands' Performance + Lifestyle Group, which includes the Sperry Top-Sider, Saucony, Stride Rite and Keds brands. The brands will join Wolverine’s existing portfolio, which includes Hush Puppies, Merrell and Wolverine.

Charming Shoppes: The acquisition of Charming Shoppes gives Ascena, which owns the Dressbarn, Maurices and Justice chains, entry into the steadily-growing large-size women's clothing market. In addition to Lane Bryant, Charming Shoppes also owns the Fashion Bug and Catherines Plus Sizes banners, for a total of more than 1,800 stores nationwide. In 2011, nearly 85% of Charming Shoppes’ sales involved plus-sized apparel.

Upon completion of the deal, which has been approved by both boards, Charming Shoppes, which is based in Bensalem, Pa., will become a subsidiary of Ascena.

“Charming Shoppes is a superb strategic fit for Ascena,” said David R. Jaffe, president and CEO, Suffern, N.Y., which operates more than 2,500 stores. “Over the past few years, we have welcomed into our family new brands and new team members while delivering increasing value to shareholders. We believe that Charming Shoppes will be no exception.”

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