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While there seems to be a debate on whether we're in a recession, retailers might answer that question with an emphatic: yes! Slowing sales have pushed some retailers to scale back their operations and even put some or all of their businesses up for auction. According to The Deal's Auction Block database, which defines the industry as both stores and restaurants, the 16 auctions announced in 2008 leads a set of 24 industries in various stages of auction so far this year. This follows 2007 when the retail sector placed in second with 65 companies in varying stages of auction, only behind the manufacturing sector with 73.
Recent entrants to the auction block include direct-mail and Web retailer Lillian Vernon Corp., which recently filed for Chapter 11, and casual dining chain Dave & Buster's Inc., which was put on the block by private equity firm Wellspring Capital Management Inc. This year could be another strong year for retail M&A. Likely newcomers to the auction block could be found amongst companies facing activist hedge fund managers. One of the larger retailers targeted by activists is department store chain Dillard's Inc. Others facing activist campaigns include Trans World Entertainment Corp., the parent of FYE, Suncoast Video and other music retailers, and fast-food chain Steak n Shake Co. Don't be surprised if these companies are put on Auction Block's "New on the Block" list later in the year. - Gerald Magpily See Auction Block database Categories Deal Video
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