Boscov’s Finds a Bidder
Wilmington, Del. Boscov’s is seeking approval of a Delaware bankruptcy court for a possible buyout, according to the Associated Press.
Philadelphia-based Versa Capital Management has emerged as the lead bidder for Boscov’s, which filed for Chapter 11 protection in August and announced that it would close 10 of its 49 stores.
According to papers filed on Wednesday, Versa has offered to pay $11 million in cash and assume Boscov’s debt.
Attorneys for Boscov’s are asking for a hearing next week to approve the proposed bid procedures and schedule an October auction or sale date.
In addition, attorneys for Boscov’s said any sale must be closed before the upcoming holiday season. They say that failing to close by the end of October could hurt Boscov’s ability to avoid liquidation.
99 Cents Only to exit Texas market
CITY OF COMMERCE, Calif. 99 Cents Only Stores announced that it will exit the Texas market where it has 48 stores to focus on its core markets of California, Arizona, and Nevada, where it has 230 stores which contribute approximately 90% of the company’s sales.
Despite years of positive same-store sales, the company’s Texas stores were only generating slightly more than half of the average sales of its non-Texas stores. Additionally, the company’s Texas operation remains unprofitable. Based on its recently completed strategic review, the company now believes that even if it continued to invest in its Texas operations over the next few years and was successful in achieving substantial sales increases, and closed its most unprofitable stores and right-sized its distribution center, the result would still likely be only a minimal profit providing an unacceptable return on investment to justify the substantial cost and effort.
Eric Schiffer, ceo of 99 Cents Only Stores said, “After more than five years of hard work by many talented associates, we have made the painful decision to cease operation of our Texas stores. Although progress was continually made over the years, we were still losing money in Texas and we determined that it was not likely we would achieve profitability in the near future or attain an acceptable level of return on investment in the long term.”
Based on the company’s unaudited financial analysis of the prior four quarters ended June 28, revenue associated with Texas operations was approximately $120 million per annum. Operating income was a loss of approximately $15 million per annum (without allocation of any non-Texas costs or overhead), or, after applying the company’s estimated annual effective tax rate, approximately 15 cents in loss per diluted share.
The impact of this decision on the company’s long term profit improvement program is expected to be positive. The cost structure of the Texas market on a percentage of sales basis was higher in all categories than the company’s other markets.
Sears.com launches 3D shopping experience
ARMONK, N.Y. Sears has partnered with My Virtual Model to launch a 3D visual search function on the updated Sears site. According to Sears, it is the first retailer to apply both a visual search and virtual model to an entire catalogue online. Sears.com said it plans to go live with visual search in late October.
The Sears site will enable shoppers to search on a specific style — such as long-sleeve tunic shirts or cropped cargo pants — and find products from the company’s catalogue of clothing, shoes and accessories using 3D images versus words. Shoppers can create countless combinations using a virtual model they can build and personalize to match their measurements — height, weight, body shape — and a headshot photo to ensure that the style, color, pattern and fit are right. The 3D angle allows users to view garments on themselves from the front, side and back, and shoppers can also email images of their looks to friends and family to help them make final purchasing decisions.
“Sears is transforming the online shopping experience by offering consumers cutting edge visual search and virtual model capabilities,” said Rob Mills, vp of Sears online business unit. “By allowing shoppers to visually search for and view items in 3D, to see how they’ll actually look on themselves in various combinations, and virtually share their finds with friends and family, Sears is providing shoppers with a superior social and e-commerce experience that we believe will increase satisfaction and loyalty.”