DeBartolo Has Option for 35% of Allied Stores

Edward J. DeBartolo Corp. confirmed Friday that it has acquired an option to acquire through Campeau Corp. a 35% interest in Allied Stores Corp.

Edward J. DeBartolo, a shopping mall developer, assisted the Toronto-based Campeau with a last-minute $150-million loan through his Youngstown-based company so Campeau could close the deal to purchase Allied.

Allied, which is based in New York, operates nearly 700 department or specialty stores in 46 states including the Brooks Bros., Ann Taylor and Bonwit Teller specialty chains.

Campeau, a developer, owner and manager of commercial income-producing property in North America, also confirmed that it plans to sell more than $1.1 billion in Allied assets, including the Bonwit Teller and Garfinckel’s department stores.

Must Sell Divisions

In filings Friday with the Securities and Exchange Commission, Allied said that under a $3.28-billion loan agreement it has with Citibank and Manufacturers Hanover Trust Co., it must use its best efforts to sell 16 divisions as soon as possible.

Under the loan agreements, Allied said it must realize proceeds totaling $1.1 billion by Dec. 31, 1988. So far, it said it has no agreements for any sales.

The 16 divisions the company must sell under the loan agreement accounted for nearly half of its gross square footage and 38.4% of net sales last year and include department stores such as Joske’s and specialty stores such as Bonwit Teller and Garfinckel’s, it said.

The company said it will retain its Jordan Marsh-New England, the Bon, Stern’s, Maas Bros., Jordan Marsh-Florida, Brooks Bros. and Ann Taylor stores.