Best Buy abandons European strategy with Carphone Warehouse sale
Minneapolis — Consumer electronics retailer Best Buy is leaving the European market. The company is selling its stake in a joint European venture with U.K.-based consumer electronics retailer Carphone Warehouse Group PLC for cash and stock worth about $775 million USD.
Best Buy Co. will also pay Carphone 29 million pounds (about $45 million) related to existing agreements that will be terminated when the deal closes. The U.S. retailer also said that it will incur an approximately $200 million asset impairment charge related to the stake sale.
Best Buy says it is ending the agreement, launched in 2008, due to difficulties that both the company and the European economy have faced in recent years.
“After reviewing the business and spending time with our partners, we concluded that the timing and economics were right to enter into this agreement with CPW," said Hubert Joly, president and CEO of Best Buy.
The transaction allows Best Buy to simplify its business, improve its return on invested capital and strengthen its balance sheet, Joly added.
"Each international market is different and the sale of our European operations should not suggest any similar action in our other international businesses," said Joly.
Both companies’ boards approved the transaction, which still needs the approval of Carphone shareholders. The deal is targeted to close by the end of June.
Office Depot reports Q1 loss
Boca Raton, Fla. — Office products retailer Office Depot reported a worse-than-expected first quarter net loss of $17 million, compared with net earnings of $41 million a year earlier, hurt by lower sales and costs related to its pending merger with OfficeMax. The company also said it would hold a special meeting with investors to seek approval for the merger.
Total sales decreased 5% to $2.72 billion. North American retail stores sales were down 6% to $1.1 billion, while same-store sales decreased 5%. International revenue decreased 8% to $759 million.
“Although our first quarter results were heavily impacted by the holiday timing, we saw a modest improvement in trends late in the period, which gives us confidence going into the second quarter and, ultimately, in achieving our full-year targets,” said Neil Austrian, chairman and CEO of Office Depot. “I’m also very pleased with the progress we have made on the merger over the past two months, especially the selection of Mike Newman, CFO of Office Depot, and Bruce Besanko, CFO of OfficeMax, to lead the integration efforts for the two companies.”
The Office Depot-OfficeMax merger, an estimated $1.2 billion deal, is awaiting approval by the Federal Trade Commission.
Former Sports Authority exec new Big Lots CEO
COLUMBUS, Ohio — Big Lots has named David Campisi as its new CEO and president. Campisi succeeds Steve Fishman, who announced in December 2012 his intention to retire upon the appointment of his successor.
Fishman will also step down from the board of directors immediately following the 2013 annual meeting of shareholders on May 30, at which time Campisi will be appointed as a director. The board also plans to elect a non-executive chairman of the board.
Campisi has more than 30 years of retail industry experience. He was most recently chairman and CEO of Respect Your Universe, a publicly traded company focused on premium performance apparel and equipment. Prior to RYU, Campisi was an executive with the multibillion dollar retailer the Sports Authority for nearly 7 years, rising to become chairman and CEO. Prior to the Sports Authority, he held executive-level merchandising roles at Kohl’s, Fred Meyer and Meier and Frank Company.
"David Campisi is a seasoned retail executive with a track record of success in the industry," said Jeffrey P. Berger, chairman of the nominating and corporate governance committee and leader of the board’s search committee. "The board was attracted to David’s broad base of successful merchandising experience and his collaborative leadership skills. Both of these characteristics were key to the board’s search and they are believed to be paramount as Big Lots enters its next phase of growth and evolution as a company."
"On behalf of the entire board of directors, I would like to thank Steve for his vision and passion for Big Lots over the past nearly eight years. Under Steve’s leadership, the business has provided significant cash and returns to shareholders while elevating our brand and positioning in the marketplace. The board is confident Steve leaves the business with a well-established management team and a strategy to be successful. We know he will be watching closely our progress and we wish him all the best in his retirement," added Berger regarding Fishman.
"I have been impressed with the results and long-term returns which the management team has delivered for shareholders. Big Lots has a unique niche as the largest broadline closeout retailer in North America, and after spending time with the board of directors, I am excited about the opportunities to build upon what Steve and the team has created," said Campisi.