PHILADELPHIA, AUG. 13 -- Woodward and Lothrop and the former owners of the Philadelphia-based John Wanamaker department stores have settled their dispute over the price Woodies paid for the retail chain.
Neither Woodward & Lothrop, the privately held Washington retailer that bought Wanamakers, nor Carter Hawley Hale Stores Inc., the Los Angeles company that sold the chain, would disclose the terms of the settlement.
Both, however, claimed victory in the dispute over how much the stores were worth. Woodies said it was overcharged by the sellers and did not discover how little the stores were worth until its auditors went to work.
"We are satisfied. ... We are happy that is settled and we do not have to work our way through the courts," said Robert Mulligan, vice chairman of Woodward & Lothrop. The settlement was reached a week ago, he said.
Woodward & Lothrop, which paid $183 million for Wanamakers, had sought a refund of about $57 million on the grounds that Carter Hawley Hale misrepresented the value of the 16-store chain.
Carter Hawley Hale spokesman Bill Dombrowski said his company had agreed to make a partial refund of the price. He described the refund as a "minor adjustment" that would have no material impact on the financial statements of Carter Hawley Hale.
Dombrowski said such adjustments are commonplace when retailing concerns are sold because of the time it takes to appraise the value of a retailer's inventory.
"We are very happy with the way it turned out," he said.
The two department store operators have been fighting each other in the Philadelphia Court of Common Pleas and the U.S. District Court in Philadelphia since mid-May.
According to documents on file in federal court, Woodward & Lothrop alleged that Carter Hawley Hale and its accounting firm, Price Waterhouse, misrepresented the value of many of Wanamakers' assets.
Touche Ross & Co., Woodward & Lothrop's accountants, took issue with the accounting treatment of more than a dozen items, ranging from the value of Wanamakers' inventory to the method of depreciating Christmas ornaments.
The litigation was begun by Carter Hawley Hale, which filed suit May 13 in Philadelphia Court of Common"We are satisfied. ... We are happy that is settled." Woodies' Robert Mulligan Pleas seeking a declaratory judgment upholding the price.
In mid-June, the case was transferred to federal court for arbitration.
Mulligan said attorneys for both sides had started taking depositions last week in preparation for trial.
He would not say whether Woodward & Lothrop expected to get a partial refund of the $183 million it paid for Wanamakers.