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Baton Rouge will present some tough decisions for Dillard Department Stores Inc. of Little Rock as a result of its pending merger with D.H. Holmes Co.
Of the 18 Holmes stores Dillard's will acquire through the transaction-located in Louisiana, Mobile, Pensacola and Jackson, Miss.-Baton Rouge represents the only market in which the Arkansas retailer already has operations (through its 13-year-old, 180,000-square-foot store in Cortana Mall). Holmes and Dillard's both had stores in Alexandria until February when Holmes sold the site in a move that apparently helped pave the way to closing the merger.
As a result of Dillard's newfound cross ownership of former competing stores in Baton Rouge, the financial statements of the three local Holmes outlets-along with demographic data from this area-are likely being subjected to some heavy-duty number crunching at Dillard corporate headquarters.
Should the results fall on the wrong side of the ledger, the consequences may well be dire for the 350 Holmes employees now in Baton Rouge.
Some Things Never Change
Dillard's track record indicates it isn't bashful about closing stores which don't cut the mustard in view of its performance standards. For example, Dillard's acquired 27 Joske's stores in Texas in 1987 and quickly sold, liquidated or converted 13 of those locations.
"Dillard's already is in the prime retail location in Baton Rouge (Cortana)," said Miriam Meglin, an analyst with Johnson, Rice & Co. in New Orleans. "I am not familiar with Holmes' other locations (locally), but Dillard's is highly focused in their retail strategy and fairly uncompromising about their stores. I've seen reference to their (Dillard's) CEO saying that the one thing you can't change (about a store) is location."
Analysts can only speculate as to the company's thinking for now since...