Collective Brands to close 475 underperforming stores as it considers selling itself
Topeka, Kan. — Collective Brands, parent company of Payless and Stride Rite shoe chains, announced Wednesday that it would close 475 underperforming stores over the next three years and has hired a firm to help it explore its options.
The company hired Perella Weinberg Partners and Kurt Salmon as advisors to explore strategic alternatives.
Collective Brands reported a 2Q loss of $35 million on Wednesday, compared to a profit of $21.1 million a year earlier. The loss included a one-time charge of $83.6 million based mostly on the declining value of its stores and of Stride Rite’s trade name. The company currently operates 4,844 stores, of which 4,461 are Payless stores.
Of the 475 stores targeted for closure over the next three years, more than 300 will be shuttered by the end of the year, including about 275 Payless and 75 Stride Ride children’s stores. The strategy, said Collective, is to optimize the performance of its Payless and Stride Rite stores.
"While the second quarter was challenging for the company, we are taking aggressive actions to improve the business," said CEO Michael J. Massey.
The company’s board adopted a short-duration shareholder rights plan to fend off a potential hostile takeover. Its largest shareholder is PrimeCap Management Co., with just over 10% of outstanding shares.
Steve Jobs resigns as Apple CEO
Cupertino, Calif. — Apple announced late Wednesday that its CEO Steve Jobs has resigned his post, effectively immediately, to be succeeded by current COO Tim Cook.
Jobs, the visionary whose contributions created the world’s most innovative technology company, is battling pancreatic cancer and has received a liver transplant. Concerns about his health led to his decision to resign.
"I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come," Jobs, 56, wrote in a letter to the Apple Board of Directors and "the Apple Community."
Jobs has been elected Apple’s chairman of the board, and Cook will join the board, effectively immediately.
Jobs submitted his resignation to the board on Wednesday evening and strongly recommended that the board implement its succession plan and name Tim Cook as CEO.
As COO, Cook was previously responsible for all of the company’s worldwide sales and operations. He also headed Apple’s Macintosh division.
The financial impact of Jobs’ announcement was felt almost immediately as shares of Apple plummeted in the minutes following his announcement.
NRF: Proposed regulatory relief must go further
Washington, D.C. — The National Retail Federation welcomed plans announced by the Obama Administration Tuesday to streamline hundreds of government regulations, but said the plan does not go far enough.
“This is a step in the right direction but at the same time the Administration is promising to reduce regulations, the government is continuing to crank out new rules that hamper the ability of the business community to create desperately needed new jobs,” NRF senior VP for government relations David French said. “It’s time to stop the presses at government agencies and on Capitol Hill and focus on reform of what’s already on the books.”
French cited examples such as pending regulations proposed by the National Labor Relations Board that would make it easier for unions to win organizing elections, rules under health care reform that will force many employers to reduce their workforces in order to meet the increased payroll costs of government-mandated health coverage, trade barriers on textiles and apparel, OSHA recordkeeping requirements and the Commerce Department’s agenda for consumer privacy rules that could curtail improvements to online shopping.
President Obama signed an executive order in January requiring federal agencies to review business regulations and streamline or eliminate them where possible. The Administration Tuesday unveiled a package of regulations that have been identified for action, and said businesses would “likely” save $10 billion over the next five years.
“We’ve been presented with a package of rules the Administration says should be streamlined, but it’s vital that what has been proposed actually be accomplished,” French said.
In addition to reducing government regulation, French said the Administration should focus on assisting employers, especially small businesses, with regulatory compliance rather than aggressively pursuing fines and penalties.