Friday, June 15, 2001

Officials of Federated Department Stores and Liberty House
both are refusing to comment about whether the Hawaii
retailer may get a new owner.

Liberty House-
heats up

Sources are scarce in
national reports that the
isle-based stores may
become Macy's outlets

By Tim Ruel

A national eye has turned on Hawaii, following reports that Liberty House stores may become outlets for the Macy's retail chain, but despite an apparent lack of sources of information about the deal.

The Wall Street Journal picked up the story Wednesday, identifying an article in the Honolulu Advertiser as its only source of information.

In turn, the popular Bloomberg News service rewrote the Wall Street Journal article, adding none of its own sources. Reuters and the Associated Press moved reports as well.

Local ABC affiliate television station KITV-4 news jumped on the story, focusing more on the man-on-the-street speculation over the sale of Liberty House rather than on the missing details of the negotiations.

Pacific Business News hit the radio and the Web with its own ruminations about the uncertainty of all the information.

In the corporate hometown of Federated Department Stores Inc. -- the company said to be in negotiations to buy Liberty House stores -- the Cincinnati Enquirer said it had confirmed the talks through its own sources, but declined to name them.

Federated is the parent of the Macy's retail chain, as well as Bloomingdale's, Bon Marche, Burdines and Goldsmith's, with more than 430 stores worldwide.

Media hounds who have been seeking the official word on the discussions have placed several calls to Liberty House officials and to the company's public relations consultant Russell Pang. It's a dead end.

Liberty House president and director John Monahan won't return calls seeking comment. Pang won't comment and won't say why.

"We've had some inquiries, yes," said Barbara Tunno, vice president of sales promotion at Liberty House. "They call John Monahan, they call me, they call Russell."

The lack of comment is a switch for Monahan, who frequently talked to the press during Liberty House's three-year $16 million Chapter 11 bankruptcy case. At one point, he sat down with the editorial boards of both of Honolulu's daily newspapers, candidly answering questions.

A Federated spokeswoman has also repeatedly declined to comment.

In 1997, Federated reportedly entered talks to buy an uncertain portion of Liberty House, but those negotiations lapsed months before Liberty House filed for bankruptcy.

Federated already provides private-label merchandise for Liberty House.

The 151-year-old kamaaina retailer is currently owned by two mainland "vulture capital" firms that bought up the bulk of Liberty House's devalued debt during its bankruptcy. The firms were not expected to hang onto Liberty House for long.

During the bankruptcy, Liberty House scaled back operations and now owns 12 department stores and eight specialty shops.

The retailer was once part of the former Amfac dynasty, and still is one of Hawaii's largest companies, with some 3,000 workers.

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