Is Dillard’s Next?

Shares of Dillard’s Inc. (Little Rock, Ark.) rose Friday amid speculation that the nation’s third-largest department store chain was the next acquisition target.

“All eyes will now be on Dillard’s as the last major acquisition target within the department store space,” said Banc of America Securities analyst Dana Cohen, the day after The May Department Store Co. (St. Louis) announced the purchase of the Marshall Field’s chain from Target Corp. (Minneapolis). Conjecture is that Federated Department Stores (Cincinnati), now Number Two in the field, is anxious to add stores after losing out in the Field’s race.

With the addition of Marshall Field’s, May will have 500 department stores, about 40 more than its main rival Federated. However, rumors persist that Federated could get a few of the Marshall Field’s stores in specific markets from May.

Gene Kahn, May’s chairman and chief executive, told analysts during a conference call that his goal is to use Marshall Field’s as “a learning laboratory,” ideally to enhance May’s upscale merchandising. “We really believe that Marshall Field’s is a unique opportunity for us to leverage some of their best practices, resource structure and merchandising offense into the May stores,” Kahn said, adding that “we’re trying to bring May’s persona upward.”

Kahn said Marshall Field’s shoppers would see little difference once the deal is completed, presumably in late July or early August. May plans to keep the Marshall Field’s name and run it as an autonomous, Minneapolis-based division.