Charging that acquisition of the Garfinckel, Brooks Brothers, Miller & Rhoads retail chain by Gamble-Skogmo Inc., another big retailer, would violate antitrust laws, Garfinckel yesterday sued Gamble-Skogmo in federal court.
The lawsuit, filed in Delaware, seeks to force Gamble-Skogmo to sell the approximately 12 percent of Garfinckel common stock that it purchased recently.
In a separate development in the Garfinckel takeover fight, Joseph R. Harris Jr., son of the founder of the Joseph R. Harris retail chain, confirmed that he and other family members have sold "substantially all" of their Garfinckel, Brooks Brothers shares to Gamble-Skogmo.
The Harris family has owned about 10.7 percent of Garfinckel stock - the largest single block - since selling the family clothing chain to the Garfinckel group in 1971.
Harris did not disclose the price Gamble-Skogmo paid for the shares. At the $25-per-share price Garfinckel stock has traded at recently, the 483,000 Harris family shares would be worth more than $12 million.
Garfinckel officials say they believe Gamble-Skogmo paid a premium for the Harris shares, and purchased additonal stock on the open market, obtaining a total a 560,000 shares, more than 12 percent of the outstanding stock.
Harris said he and other family members sold the stock because, "For some period of time, we have wanted to diversify our investments." The Harrises no longer are involved in management of the clothing chain, which recently was renamed Harris and Friends.
Harris said his father, Joseph R. Harris Sr., has not disposed of his Garfinckel holdings, which are reported to be a minor part of the total family holdings. Harris said he remains a member of the board of directors of the Garfinckel chain.
The lawsuit against Gamble-Skogmo had been threatened since last Friday when Garfinckel revealed the stock purchases by the Minneapolis-based firm.
Gamble-Skogmo officials repeatedly have insisted they are not trying to take over Garfinckel, but executives of the Washington company have proceeded as if a takeover were threatened.
The petition filed in U.S. District Court in Delaware, where Gamble-Skogmo is incorporated, charges that any merger would violate antitrust laws by reducing retail competition in general and specifically among sellers of young women's and large-size clothing.
The lawsuit notes that Garfinckels owns a chain called Catherine's Stout Shoppes which, with nearly 80 stores, is the nation's third-largest retailer of large-size women's clothing. Gamble-Skogmo owns Woman's World, with 55 stores, the fourth largest chain in the same business. Catherine's and Woman's World both have stores in at least eight states.
The two parent companies also have subsidiaries that complete in the sale of popular-priced apparel for young women - Garfinckel's Harris and Friends, and Gamble-Skogmo's Mode O'Day.
Other aspects of the two retail empires are more diverse. The Garfinckel operation, expected to gross $400 million this fiscal year, is mostly a soft-goods retailer specializing in clothing sold at higher price levels.
Gamble-Skogmo is primarily a hard-goods retailer. Its $1.6-billion-a-year business was founded as a group of small-town hardware stores called Gamble's and now includes Red Owl supermarkets, Rasco auto supply stores. Tempo-Buckeye and Howard Brothers discount stores, and a dozen other chains, stores, and a dozen other chains.