Charming Shoppes Reports 4Q Loss
Bensalem, Pa. Charming Shoppes Inc. said Wednesday it swung to a loss in its fourth quarter as sales at stores open at least a year fell at each of the company’s brands.
For the quarter ended Feb. 2, the company reported a loss of $127.6 million, compared to a profit of $24.9 million in the prior-year quarter.
Revenue fell 10% to $784.9 million from $874 million in a year earlier. The company said sales in the prior-year period reflected an extra week.
Meanwhile, same-store sales dropped 9%.
Dorrit J. Bern, chairman and chief executive, called the results “extremely disappointing” and blamed downward traffic trends and customer responses to the company’s stores and catalogs. Bern said the company had to mark down more merchandise, which hurt margins.
For the year, the retailer swung to a loss of $86.6 million from a profit of $108.9 million in the prior year. Revenue fell 2% to $3 billion from $3.07 billion.
Staples makes offer to buy Corporate Express
FRAMINGHAM, Mass. Staples today confirmed that it will make a public offer for all the outstanding ordinary shares and American depositary shares issued by Corporate Express for a price of EUR 7.25 ($8.63) per ordinary share and ADS.
“While we continue to be disappointed that Corporate Express’ Executive and Supervisory Boards have not entered into a negotiation with us about the transaction, we remain very enthusiastic about a combination between the two companies,” said Ron Sargent, Staples chairman and ceo. “Based on public information, Staples firmly believes its proposal is the most valuable option available to Corporate Express’ shareholders and will deliver significant benefits for customers and employees.”
Staples expects to submit a request for approval of the offer memorandum in respect of the offer to the Netherlands Authority for the Financial Markets before May 13, which is the date by which under Dutch law a request for approval must be submitted to the AFM. In addition, Staples plans to make all necessary competition regulatory filings prior to May 13.
CVS settles ranitidine dispension suit
WOONSOCKET, R.I. CVS Caremark today said that it has reached a settlement agreement with the U.S. Department of Justice and a number of state Attorneys General to resolve an investigation into the practice of its CVS/pharmacy retail pharmacies of dispensing the generic drug ranitidine in capsule rather than tablet form to Medicaid recipients.
CVS Caremark has denied any wrongful conduct and said that that for many years it has dispensed the capsule from of rantidine to all patients, not just Medicaid recipients, due to the fact that the acquisition cost of capsules was lower than the cost of tablets. According to the company, both forms contain the same active ingredients.
According to CVS Caremark, the government alleged that the practice of dispensing capsules instead of tablets was motivated by a desire to increase Medicaid reimbursement. The company has expressly denied this allegation.
The settlement calls for payment by the company of $36.7 million, plus approximately $800,000 in investigative costs and other fees. The company said this will not affect its 2008 earnings results.