Hutzler Brothers Co., the Baltimore-based department store chain, said yesterday it has reached an agreement in principle to acquire the retail business of B. Altman & Co., financed in part by an infusion of capital from W. R. Grace & Co.
Terms of the agreements were not disclosed.
The Altman department store chain was purchased last year for $100 million by five real estate investors. Hutzler said the investors will continue to own Altman's real estate assets and will lease the stores to Hutzler's, which will operate them under the Altman name. Altman, founded in 1865, operates seven stores in New York, New Jersey and Pennsylvania.
In a related agreement, the real estate investors have agreed to acquire about 10 percent of Hutzler's, and Grace will acquire about 20 percent of Hutzler's through a new-issue of common stock.
The 125-year-old Hutzler's operates 10 stores in the Baltimore area and the Eastern Shore, plus the specialty retail chain of Sara Fredericks Salons and sportswear shops. The company is owned by a group headed by Angelo R. Arena, former chairman of Marshall Field & Co. of Chicago, and Edward McCormick Blair, a Chicago investment banker.
Grace is primarily a chemical company, with interests in natural resources and consumer outlets such as Hermann's Sporting Goods and Channel Home Stores. The Hutzler investment was seen as "a good opportunity to get involved with one of the best names in retailing," said Christopher Tofalli, a Grace spokesman.
Hutzler's would not comment yesterday beyond a press release.
The agreement satisfies at least one of the goals of Arena, an aggressive retail executive who reportedly sought to buy Altman while he was at Marshall Field.
Arena, who once worked for Neiman-Marcus, said in a 1983 interview that he wanted "to take Hutzler's as high as you can go from a fashion point of view," and that "Hutzler's could become the Neiman-Marcus of the Baltimore area."
The Altman stores had been owned until last year by the Altman Foundation, a charitable institution that decided to sell them for tax purposes.
Hutzler's and Grace's boards of directors have approved the agreements, which are now subject to the completion of definitive agreements among all the parties.