Circuit City Turns Down Bid
Richmond, Va.Richmond, Va., The directors of Circuit City Stores Inc. voted to refuse last month’s $3.25 billion acquisition bid by Highfields Capital Management LP, a Boston-based hedge fund and Circuit City shareholder.
The board said it had unanimously determined that further exploring the transaction proposed by Highfields or other sale alternatives would not be in the best interests of the company’s shareholders, and that the company can best maximize shareholder value by continuing to aggressively implement the strategic, operational and financial initiatives currently under way and contemplated for the future.
Highfields is one of Circuit City’s largest shareholders, with about 6.8% of the stock.
NRF Urges Senate to Reject Minimum-Wage Increase Amendment
Washington, The National Retail Federation (NRF) today encouraged the Senate to reject an amendment that would raise the federal hourly minimum wage to $7.25 in three steps over 26 months. It would be an increase of $2.10, or 41%, over the current $5.15 minimum. The amendment, which the Senate will vote on today, would add a minimum wage increase to S 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Steve Pfister, NRF senior VP for Government Relations, said, “Not only would the increase proposed by Senator Kennedy represent an unprecedented and extreme hike in the entry-level wage, it also would serve as a poison bill to the bankruptcy bill, which has been a long-standing priority of the retail industry.”
Monday Afternoon Earnings Roundup
•Freeport, Maine-based L.L. Bean announced annual net sales of $1.4 billion for the 2004 fiscal year ended Feb. 27, which is a 9% increase over 2003 net sales of $1.3 billion. In addition, comp-store sales increased 7% over 2003.
The company plans to convert a factory store in New Hampshire to a retail store this year, and also intends to open two new stores in 2006, and three stores in 2007. The new stores all are planned for the New England/mid-Atlantic region.
•San Francisco-based Dick’s Sporting Goods reported net income for the year ended Jan. 29, 2005, was $75.1 million, or $1.42 per share, compared to net income of $50.7 million, or $1.01 per share, for the 2004 fiscal year. Total sales for the year increased 43% to $2.1 billion, while comp-store sales increased 2.6%. For the fourth quarter ended Jan. 29, Dick’s reported net income of $39.9 million, or 75? a share, compared to $26 million, or 50? per share, for the same period in 2004. Net sales increased to $788 million from $474.4 million. Fourth-quarter net earnings were bolstered by Dick’s July 2004 acquisition of Galyan’s Trading Co.
•Hudson, Ohio-based Jo-Ann Stores reported that net income for the year ended Jan. 29 increased 15.2% to $46.2 million, compared to $40.1 million in fiscal 2004. Net sales for the fiscal year increased 4.5% to $1.81 billion from $1.7 billion in 2004. Comp-store sales increased 3.2%. For the fourth quarter, Jo-Ann reported net income of $32.4 million, compared to $26.7 million in the prior year. Fourth-quarter net sales increased 6.4% to $588.2 million from $552.6 million a year ago. Jo-Ann Stores, which ended the year with 851 stores, expects to open about 40 superstores this year and close about 50 traditional units.