Garfinckel, Brooks Brothers, Miller & Rhoads, Inc. yesterday announced that the Washington-based retailer signed a letter of intent to purchase a seven-store Texas retail chain for $27.2 million in cash.
The chain, Frost Bros., is considered a high quality specialty store business and has units in Austin, Laredo, Houston, San Antonio and Corpus Christi.
The purchase was announced jointly by Garfinckel's and Manhattan Industries Inc., the clothing manufacturer that now operates the Frost Bros. stores.
The deal will not be final until a definite agreement is put together and the sale is approved by both companies' boards and government agencies.
The purchase also includes a Houston store now run by Manhattan's Battelstein's department store division. In addition, Garfinkel's was given an option to purchase the Memorial City unit of Battelstein's in Houston. These two stores would become Frost Bros. units.
David R. Walters, Garfinckel's chairman, called the purchase "an excellent one" for the company and its shareholders.
"Frost Bros., a very profitable fashion specialty chain, fits well into Garfinckel's strategic plans. Importantly, the acquisition enables Garfinckel's to become a significant factor in the growing Texas market and thus further broaden our geographic diversification and position as a national retailer."
Laurence Leeds Jr., the Manhattan chairman, said the decision to sell the Texas stores is consistent with his company's plans to sell its retail operations.