Market power and regulation: The last great US department store consolidation?

Wood, Steven and Wrigley, N (2007) Market power and regulation: The last great US department store consolidation? International Journal of Retail and Distribution Management, 35 (1). pp. 20-37.

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Abstract

Purpose

To examine the impact of the merger of the two largest US department store companies on the competitive state of the sector and specifically the anti-trust implications of the consolidation.

Approach

Based on semi-structured interviews with leading US department store executives as well as an ongoing close dialogue with US retail analysts.

Findings

The consolidation raises considerable anti-trust issues with the creation of a $30 bill sales company. Consistent with previous recent rulings, the Federal Trade Commission (FTC) has adopted a broad view of the department store market from the standpoint that the consolidation is essentially defensive – in short, the sector is failing because it is not a separate and distinct market. However, the divestiture of 75 stores will give competitors footholds in new markets thereby changing the geography of competition in many catchments. This is likely to be the largest consolidation that the competition authorities will effectively allow, representing the last opportunity for the sector to become a more robust competitor against alternative formats that have intervened in its key product lines.

Originality/Value

Recent restructuring of the US department store industry has generated a relatively limited academic literature, despite considerable M&A activity, subsequent organisational reorganisation, and sales of $88 bill per year. Transformation of the competitive landscape of the industry raises important issues of market regulation and corporate strategy.

Item Type:	Article
Divisions :	Faculty of Arts and Social Sciences > Surrey Business School
Authors :	Name Email ORCID Wood, Steven Sm.Wood@surrey.ac.uk Wrigley, N
Date :	2007
DOI :	10.1108/09590550710722323
Copyright Disclaimer :	© Emerald Group Publishing Limited 2007. Published by Emerald Group Publishing Limited.
Uncontrolled Keywords :	Department stores, Regulation, Acquisitions and mergers
Depositing User :	Symplectic Elements
Date Deposited :	03 May 2012 17:30
Last Modified :	16 Jan 2019 16:32
URI:	http://epubs.surrey.ac.uk/id/eprint/209764

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