0000950109-95-003259.txt : 19950817 0000950109-95-003259.hdr.sgml : 19950817 ACCESSION NUMBER: 0000950109-95-003259 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950816 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAY DEPARTMENT STORES CO CENTRAL INDEX KEY: 0000063416 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 430398035 STATE OF INCORPORATION: NY FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 1933 Act SEC FILE NUMBER: 033-55255 FILM NUMBER: 95564650 BUSINESS ADDRESS: STREET 1: 611 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143426300 424B5 1 PRO SUPP PROSPECTUS SUPPLEMENT (To Prospectus dated October 7, 1994) $400,000,000 The May Department Stores Company $125,000,000 7.15% NOTES DUE 2004 $125,000,000 7.625% DEBENTURES DUE 2013 $150,000,000 8.125% DEBENTURES DUE 2035 ---------------- Interest payable February 15 and August 15 ---------------- THE DEBENTURES DUE 2035 WILL BE REDEEMABLE ON 30 DAYS' NOTICE, AS A WHOLE OR IN PART ON OR AFTER AUGUST 15, 2015, AT 100%, TOGETHER WITH ACCRUED INTEREST. NEITHER THE DEBENTURES DUE 2013 NOR THE NOTES DUE 2004 ARE REDEEMABLE PRIOR TO MATURITY. ---------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------- NOTES DUE 2004--PRICE 99.737% AND ACCRUED INTEREST DEBENTURES DUE 2013--PRICE 98.987% AND ACCRUED INTEREST DEBENTURES DUE 2035--PRICE 99.939% AND ACCRUED INTEREST ----------------
UNDERWRITING PRICE TO DISCOUNTS AND PROCEEDS TO PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3) --------- -------------- ------------- Per Note Due 2004..................... 99.737% .650% 99.087% Total................................. $124,671,250 $812,500 $123,858,750 Per Debenture Due 2013................ 98.987% .825% 98.162% Total................................. $123,733,750 $1,031,250 $122,702,500 Per Debenture Due 2035................ 99.939% .875% 99.064% Total................................. $149,908,500 $1,312,500 $148,596,000
-------- (1)Plus accrued interest from August 15, 1995. (2) The Company has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. (3) Before deducting expenses payable by the Company estimated at $125,000. ---------------- The Notes Due 2004, the Debentures Due 2013 and the Debentures Due 2035 (collectively, the "Offered Debt Securities") are offered, subject to prior sale, when, as and if accepted by the Underwriters named herein, and subject to approval of certain legal matters by Davis Polk & Wardwell, counsel for the Underwriters. It is expected that delivery of the Offered Debt Securities will be made on or about August 18, 1995, at the office of Morgan Stanley & Co. Incorporated, New York, N.Y., against payment therefor in immediately available funds. ---------------- MORGAN STANLEY & CO. MERRILL LYNCH & CO. Incorporated August 15, 1995 NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. ---------------- USE OF PROCEEDS The May Department Stores Company (the "Company") intends to use the net proceeds from the sale of the Offered Debt Securities for the acquisition of certain assets of John Wanamaker and Woodward & Lothrop and for capital expenditures, working capital needs and other general corporate purposes. RECENT DEVELOPMENTS On August 8, 1995, the Company and J.C. Penney Company, Inc. announced that they will acquire John Wanamaker and Woodward & Lothrop stores in the Philadelphia, Washington and Baltimore market areas. The United States Bankruptcy Court of the Southern District of New York approved a Company/J.C. Penney joint bid in the amount of $460 million of net distributable value to creditors. Under the joint bid, the Company will acquire 14 Wanamaker stores in the Philadelphia area, 13 of which it will operate as Hecht's stores and one of which it will sell to a third party, and three Woodward & Lothrop stores in the Washington area, two of which it will operate as Lord & Taylor stores and one of which it will operate as a Hecht's store. In addition, the Company will acquire two distribution centers, one of which it will operate and one of which it will sell to a third party. The Company expects that the transaction will close later in August. JULY 1995 SALES RESULTS The Company reported preliminary sales of $801.4 million for the four-week period ended July 29, 1995, a 10.1% increase over $727.8 million in the similar fiscal period last year. Department store sales for the month of July totaled $635.1 million, up 8.1% or $47.7 million over last year. Sales for Payless ShoeSource were $166.3 million, an increase of 18.4% or $25.9 million over last year's similar period. July 1995 sales compared to July 1994 sales were as follows:
JULY SALES (MILLIONS) --------------------------------------- FISCAL FISCAL PERCENT STORE-FOR-STORE* 1995 1994 INCREASE INCREASE ------ ------ -------- ---------------- Department stores....................... $635.1 $587.4 8.1% 5.0% Payless ShoeSource...................... 166.3 140.4 18.4 3.0 ------ ------ ---- --- Total................................. $801.4 $727.8 10.1% 4.6% ====== ====== ==== ===
-------- * Store-for-store sales represent sales of those stores open during both years. Sales have been restated to exclude the sales of stores that have been closed and not replaced. Year-to-date revenues, including sales of nonreplaced closed stores and finance charge revenue, were $5.74 billion in 1995 and $5.33 billion in 1994. S-2 SECOND QUARTER AND FIRST SIX MONTHS RESULTS The Company reported that fully diluted earnings per share for the 13 weeks ended July 29, 1995, increased 8.2% to $.53, compared with $.49 per share in the second quarter of 1994. Net earnings were $141 million, compared with $130 million a year ago. Sales were $2.87 billion, up 9.4% from $2.62 billion during the same period in 1994. For the six months ended July 29, 1995, the Company's fully diluted earnings per share were $.95, an increase of 5.6%, compared with $.90 in 1994. Net earnings were $255 million, compared with $242 million a year ago. Sales increased 8.1% to $5.56 billion compared with $5.15 billion last year. Net retail sales percent increases (decreases) versus last year are shown below. Net retail sales represent the sales of stores operating at the end of the latest period, and exclude finance charge revenue 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.
13 WEEKS ENDED 26 WEEKS ENDED JULY 29, 1995 JULY 29, 1995 ----------------- ----------------- STORE- STORE- FOR- FOR- TOTAL STORE TOTAL STORE ------- ------- ------- ------- Department stores......................... 8.1% 5.0% 7.0% 3.7% Payless ShoeSource........................ 14.3 (1.4) 12.3 (3.0) ------- ------- ------- ------- Total................................... 9.4% 3.7% 8.1% 2.3% ======= ======= ======= =======
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (UNAUDITED)
13 WEEKS ENDED 26 WEEKS ENDED --------------------------------- ------------------------------- JULY 29, 1995 JULY 30, 1994 JULY 29, 1995 JULY 30, 1994 ----------------- --------------- ---------------- -------------- % TO % TO % TO % TO $ REVENUES $ REVENUES $ REVNUES $ REVNUES -------- -------- ------ -------- -------- ------- ------ ------- (MILLIONS, EXCEPT PER SHARE) Net Retail Sales: Department stores...... $ 2,243 $2,075 $ 4,371 $4,084 Payless ShoeSource..... 623 544 1,192 1,061 -------- ------ -------- ------ Total Net Retail Sales. $ 2,866 $2,619 $ 5,563 $5,145 ======== ====== ======== ====== Revenues................ $ 2,948 $2,706 $ 5,735 $5,328 Cost of sales........... 2,071 70.2% 1,891 69.9% 4,017 70.0% 3,711 69.6% Selling, general and administrative expenses............... 583 19.8 540 20.0 1,175 20.5 1,095 20.6 Interest expense, net... 57 2.0 57 2.0 115 2.0 116 2.2 -------- ---- ------ ---- -------- ---- ------ ---- Earnings before income taxes.................. 237 8.0 218 8.1 428 7.5 406 7.6 Provision for income taxes.................. 96 40.5* 88 40.5* 173 40.5* 164 40.5* -------- ---- ------ ---- -------- ---- ------ ---- Net Earnings............ $ 141 4.8% $ 130 4.8% $ 255 4.4% $ 242 4.5% ======== ==== ====== ==== ======== ==== ====== ==== Primary Earnings per Share.................. $.55 $.50 $.98 $.93 Fully Diluted Earnings per Share.............. $.53 $.49 $.95 $.90 ======== ====== ======== ====== Dividends Paid per Com- mon Share.............. $.28 1/2 $.26 $.54 1/2 $.49 ======== ====== ======== ====== Primary Average Shares and Equivalents........ 250.2 249.9 249.7 249.9 Fully Diluted Average Shares and Equivalents. 265.7 265.2 265.4 265.2 ======== ====== ======== ======
-------- * Percent represents effective income tax rate. S-3 DESCRIPTION OF OFFERED DEBT SECURITIES The Notes Due 2004, the Debentures Due 2013 and the Debentures Due 2035 offered hereby (collectively, the "Offered Debt Securities" ) are to be issued under an Amended and Restated Indenture (the "Indenture"), dated as of January 15, 1991, between the Company and The First National Bank of Chicago (the "Trustee"). This description supplements the description of the general terms and provisions of the Offered Debt Securities and the Indenture set out in the accompanying Prospectus under the heading "Description of Debt Securities." The following summaries of certain provisions of the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of the Indenture, including the definitions therein of certain terms. Wherever particular sections or defined terms of the Indenture are referred to, it is intended that such sections or defined terms shall be incorporated herein by reference. GENERAL The Notes Due 2004 will be limited to $125,000,000 aggregate principal amount and will mature on August 15, 2004. The Debentures Due 2013 will be limited to $125,000,000 aggregate principal amount and will mature on August 15, 2013. The Debentures Due 2035 will be limited to $150,000,000 aggregate principal amount and will mature on August 15, 2035. The Offered Debt Securities will bear interest at the rates per annum shown on the cover page of this Prospectus Supplement from August 15, 1995, or from the most recent Interest Payment Date to which interest has been paid or provided for, payable semi-annually on February 15 and August 15 of each year to the persons in whose names the Offered Debt Securities are registered at the close of business on the first day of February or August, as the case may be, next preceding such Interest Payment Date. The Offered Debt Securities will be payable at, and may be presented for transfer or exchange to, the Corporate Trust Office of the Trustee in The City of New York or at any other office or agency maintained by the Company for such purpose, provided that, at the option of the Company, payment of interest may be made by check mailed to the registered Holders of the Offered Debt Securities at their addresses appearing in the Register (Sections 301, 305 and 902). The Offered Debt Securities will be issued in fully registered form without coupons in denominations of $1,000 or any multiple thereof. OPTIONAL REDEMPTION The Debentures Due 2035 will be subject to redemption at the option of the Company upon at least 30 and not more than 60 days' notice by mail, at any time on or after August 15, 2015 and prior to maturity, as a whole, or from time to time in part, at 100% of the principal amount thereof, together with interest accrued to the date fixed for redemption (subject to the right of Holders of record on relevant Record Dates to receive interest due on an Interest Payment Date). The Notes Due 2004 and the Debentures Due 2013 are not redeemable prior to maturity. APPLICATION OF DEFEASANCE PROVISIONS The Offered Debt Securities are subject to defeasance and covenant defeasance as described under "Description of Debt Securities--Defeasance and Covenant Defeasance" in the accompanying Prospectus. To elect defeasance or covenant defeasance the Company is required to deliver to the Trustee an opinion of counsel to the effect that the deposit of money and/or U.S. Government Obligations (as defined) in the trust created when the Company elects defeasance or covenant defeasance will not cause the Holders to recognize income, gain or loss for Federal income tax purposes. S-4 UNDERWRITERS Under the terms and subject to the conditions contained in the Underwriting Agreement dated August 15, 1995, the Underwriters named below have severally agreed to purchase, and the Company has agreed to sell to them, severally, the respective principal amount of Offered Debt Securities set forth below.
PRINCIPAL PRINCIPAL PRINCIPAL AMOUNT AMOUNT AMOUNT OF OF OF NOTES DEBENTURES DEBENTURES NAME DUE 2004 DUE 2013 DUE 2035 ---- ------------ ------------ ------------ Morgan Stanley & Co. Incorporated........ $ 62,500,000 $ 62,500,000 $ 75,000,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated.................. 62,500,000 62,500,000 75,000,000 ------------ ------------ ------------ Total.................................. $125,000,000 $125,000,000 $150,000,000 ============ ============ ============
The Underwriting Agreement provides that the obligations of the several Underwriters to pay for and accept delivery of the Offered Debt Securities are subject to, among other things, the approval of certain legal matters by counsel and to certain other conditions. The Underwriters initially propose to offer part of the Offered Debt Securities directly to the public at the public offering prices set forth on the cover page hereof and part to certain dealers at prices which represents concessions, not in excess of .40%, .45% and .50%, respectively, of the principal amounts of the Notes Due 2004, Debentures Due 2013 and Debentures Due 2035. Any Underwriter may allow, and such dealers may reallow, a concession, not in excess of .25% of the principal amount of the Offered Debt Securities. After the initial offering of the Offered Debt Securities, the offering prices and other selling terms may from time to time be varied by the Underwriters. The Company has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Company has agreed not to offer, sell, contract to sell or otherwise dispose of any of its debt securities substantially similar to the Offered Debt Securities during the period beginning on the date of this Prospectus Supplement and continuing to and including the date the Offered Debt Securities are delivered to the Underwriters, without the prior written consent of Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated. The Company does not intend to apply for listing of the Offered Debt Securities on a national securities exchange, but has been advised by the several Underwriters that such firms presently intend to make a market in the Offered Debt Securities as permitted by applicable laws and regulations. The Underwriters are not obligated, however, to make a market in the Offered Debt Securities, and any such market making may be discontinued at any time at the sole discretion of the Underwriters. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Offered Debt Securities. EXPERTS The consolidated financial statements and schedules of the Company included or incorporated by reference in its Annual Report on Form 10-K for the fiscal year ended January 28, 1995, incorporated herein by reference, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto. The reports referred to above have been included herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. LEGAL MATTERS The validity of the Offered Debt Securities offered hereby will be passed upon for the Company by Skadden, Arps, Slate, Meagher & Flom and for the Underwriters by Davis Polk & Wardwell. A member of Skadden, Arps, Slate, Meagher & Flom beneficially owns 4,000 shares of the Company's common stock, $.50 par value per share, with the associated rights attached thereto. Helene Kaplan, of counsel to Skadden, Arps, Slate, Meagher & Flom, is a member of the Company's board of directors and owns 8,100 shares of the Company's common stock, with the associated rights attached thereto. S-5