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Regulatory Constrained Portfolio Restructuring: The US Department Store Industry in the 1990s

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  • Steve Wood

    (Department of Geography, University of Southampton, Southampton SO17 1BJ, England)

Abstract

The US department store industry has undergone a recent round of strategic acquisition-based portfolio restructuring. The author analyses one such acquisition, studying how its geography was restructured in the premerger stage to conform to the Federal Trade Commission's (FTC's) ‘fix-it-first’ policy and to improve the strategic fit of the transaction. He then investigates evidence, and analyses the effects, of a new era of stricter FTC enforcement, where divestiture may no longer be sufficient in cases of horizontal market overlap. Fundamentally, the author considers the nature of ‘real regulation’ in action, as rules partially dictate investment decisions.

Suggested Citation

  • Steve Wood, 2001. "Regulatory Constrained Portfolio Restructuring: The US Department Store Industry in the 1990s," Environment and Planning A, , vol. 33(7), pages 1279-1304, July.
    • Handle: RePEc:sae:envira:v:33:y:2001:i:7:p:1279-1304
    DOI: 10.1068/a33208
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    References listed on IDEAS

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    1. Donald D. Bergh, 1997. "Predicting divestiture of unrelated acquisitions: an integrative model of ex ante conditions," Strategic Management Journal, Wiley Blackwell, vol. 18(9), pages 715-731, October.
    2. N Wrigley, 1997. "Foreign Retail Capital on the Battlefields of Connecticut: Competition Regulation at the Local Scale and its Implications," Environment and Planning A, , vol. 29(7), pages 1141-1152, July.
    3. Chevalier, Judith A, 1995. "Capital Structure and Product-Market Competition: Empirical Evidence from the Supermarket Industry," American Economic Review, American Economic Association, vol. 85(3), pages 415-435, June.
    4. Sea Jin Chang & Harbir Singh, 1999. "The impact of modes of entry and resource fit on modes of exit by multibusiness firms," Strategic Management Journal, Wiley Blackwell, vol. 20(11), pages 1019-1035, November.
    5. Cotterill, Ronald W. & Dhar, Tirtha Pratim & Franklin, Andrew W., 1999. "Post Merger Price Conduct: A Case Study of Pricing in Connecticut Markets After the 1996 Royal Ahold-Stop & Shop Merger," Research Reports 25198, University of Connecticut, Food Marketing Policy Center.
    6. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    7. Gregory Werden, 2000. "Market Delineation under the Merger Guidelines: Monopoly Cases and Alternative Approaches," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(2), pages 211-218, March.
    8. N Wrigley, 1992. "Antitrust Regulation and the Restructuring of Grocery Retailing in Britain and the USA," Environment and Planning A, , vol. 24(5), pages 727-749, May.
    9. yale-brozen, 1982. "Mergers in Perspective," Books, American Enterprise Institute, number 917621, September.
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    Cited by:

    1. Steve Wood & Jonathan Reynolds, 2014. "Establishing Territorial Embeddedness within Retail Transnational Corporation (TNC) Expansion: The Contribution of Store Development Departments," Regional Studies, Taylor & Francis Journals, vol. 48(8), pages 1371-1390, August.
    2. Neil Wrigley, 2001. "Local Spatial Monopoly and Competition Regulation: Reflections on Recent UK and US Rulings," Environment and Planning A, , vol. 33(2), pages 189-194, February.

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