Edelman Says Lucky Plans to Sell Its Specialty Stores

New York investor Asher B. Edelman said Lucky Stores plans to sell its three specialty store businesses as part of its restructuring efforts intended to discourage his $1.89-billion takeover bid.

Edelman, who met with members of Lucky’s management and investment bankers for two hours in New York on Tuesday, said he left the meeting “very disappointed.” Edelman said he didn’t know what Lucky expected to realize on the sales. Lucky shares closed at $34.625, unchanged in composite trading on the New York Stock Exchange.

Lucky has already begun liquidating its 80-store Gemco discount chain and is selling 54 of the stores to Dayton Hudson’s Target division. Lucky said previously that it will use the proceeds from the Gemco sale to repurchase up to 22% of its stock at $40 a share.

Judith Decker, a spokeswoman for Lucky, declined to identify the Lucky executives who attended the meeting and said the company had no comment.

Lucky said previously that it might dispose of its specialty store businesses as part of its restructuring. Those units are Hancock Fabrics stores, Yellow Front general stores and its automotive stores, which operate under the Checker and Kragen names. Lucky reported thatthe specialty units had operating income of $102 million on sales of $750 million for the fiscal year ended Feb. 2, 1986.

Edelman said he suggested in the meeting that Lucky spin-off the specialty units to shareholders in a tax-free transaction, but Lucky executives didn’t seem receptive. As for his next move, Edelman predicted that Lucky’s restructuring would force down the company’s share price, making the company less expensive for him to buy. “I still want the company,” he said, though for now, he plans to “sit around and watch them self-destruct.”