FINANCE

Aeropostale adopts poison pill

BY Dan Berthiaume

New York – Aeropostale Inc. has adopted a poison pill that would be set into motion if a stockholder buys 10% of the company.

The struggling retailer said it was not adopting the plan, effective November 26, 2013, in response to any takeover proposal. Rather, the plan aims to provide stockholders with adequate time to fully assess a takeover bid, and, if appropriate, allow the board time to explore alternatives to maximize stockholder value, the company said.

The announcement comes less than a week after investment firm Hirzel Capital Management LLC disclosed that it bought a 6% stake in the retailer. Also, last week, Aeropostale shareholder Crescendo Partners urged the chain to sell itself. Other investors have expressed concern about the retailer.

The company intends to put the plan to a stockholder vote at its 2014 annual stockholders meeting. The plan will expire on that day if it is not approved.

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Barnes & Noble backs into holiday season

BY CSA STAFF

Barnes & Noble faces all the same headwinds as other retailers this holiday season, but its challenges are compounded by the fact that it continues to derive the majority of its revenues from declining sales of physical books.

The operator of 673 book stores said it expects holiday same store sales to decline in the high single digits following a 4.9% comp decrease during the second quarter ended October 26.
Total Barnes & Noble sales declined 8% to $1.7 billion with each of the company’s three segments reporting reduced sales.

The retail division, which includes sales from BN.com, declined 7.5% to $921 million, the college division declined 4.6% to $737 million and most worrisome is the decline seen in the NOOK digital division where sales dropped 32.2% to $108 million. Of that amount, NOOK digital content sales were $57 million for the quarter, a decline of 21.2% compared to a year ago, due to lower average selling prices and lower device unit sales. NOOK device and accessories sales were $51 million for the quarter, a decrease of 41.3% from a year ago, due to lower unit selling volume and lower average selling prices.

Despite the sales erosion, Barnes & Noble mustered a modest profit thanks to expense control. Net earnings during the second quarter increased to $13.2 million, or 15 cents a share, compared to net earnings of $500,000, or a loss of seven cents a share the prior year.

“During the second quarter, Barnes & Noble grew earnings through improved margins and reduced expenses, while also completing another successful college rush season,” said Michael P. Huseby, president of Barnes & Noble, Inc. and CEO of NOOK Media. “The company is focused on executing its plans for the holiday season and our booksellers are prepared to welcome holiday shoppers and recommend thoughtful gift ideas for everyone on their list. We have a terrific book title line-up this holiday season, a leading assortment of educational toys and games and a full selection of NOOK devices, including our recently released new NOOK GlowLight.”

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FINANCE

Tiffany net income soars on global growth

BY Dan Berthiaume

New York – Tiffany reported a 50% increase in net income in its third quarter of fiscal 2013, increasing to $94.6 million from $63.2 million. Net sales were $911.5 million, up 7% from $852.7 million.

Net sales growth was strong worldwide but especially pronounced in the Asia-Pacific region, where net sales increased 27% compared to the same period in the prior year. Tiffany credited global net sales performance as driving its net income growth.

Looking ahead, Tiffany expects worldwide net sales to increase by a mid-single-digit percentage for fiscal 2013. The company also expects to open a net of 14 new stores globally during the current fiscal year.

“We are very pleased with our overall results. Worldwide sales growth in the quarter demonstrated the growing power of the Tiffany & Co. brand and the benefits of our expanding global presence,” said Michael J. Kowalski, chairman and CEO of Tiffany. “Operating earnings rose faster than sales, reflecting favorable product cost trends and ongoing well-controlled expenses. We’re experiencing excellent customer response to our expanded fashion jewelry designs, highlighted by the Atlas collection, as well as continued growth in our fine and statement jewelry, with particular strength in our yellow diamond collection.”

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