Company makes bid for Circuit City name
Richmond, Va. Systemax, the direct-to-consumer retailer of computers and home electronics, said it made a $6.5 million bid to purchase the well-recognized Circuit City name.
In papers filed with the U.S. Bankruptcy Court in Richmond, Va., Circuit City sought permission to sell the “Circuit City” and “The City” brand names and related Web sites, phone numbers, and trademarks to Systemax.
In addition to the cash, Systemax offered the defunct company up to 1.75% of the revenue tied to the Circuit City name that it collects in the next 30 months, according to court papers.
This is not a new practice for Systemax. In January 2008, Systemax purchased 16 stores and the brand name of CompUSA after the nationwide computer retailer liquidated most of its locations. Systemax now operates 23 CompUSA stores in four states and Puerto Rico.
Circuit City is seeking court permission to conduct an auction on May 11, with Systemax serving as the lead bidder. The Port Washington, N.Y., company would be paid a breakup fee of $250,000 if it’s not the winning bidder.
Circuit City filed for Chapter 11 protection in November 2008, and began liquidating 567 stores shortly after the holiday-shopping season ended.
The bleeding has slowed
The market may have reacted favorably last week to news that Target reported a better-than-expected 6.3% decline in March same-store sales, but don’t break out the champagne just yet. The company wisely planned conservatively for March, given discouraging economic conditions and the shifting of Easter sales into April with the late arrival of the holiday. In essence, the company under-promised and over-delivered, to the extent that a same-store sales decline of 6.3% on top of a prior-year same-store sales declined of 4.4% can be regarded as over-delivering.
“Our guests continue to be cautious, but we have begun to see encouraging signs in the operating results of both of our business segments,” said Target chairman, president and CEO Gregg Steinhafel. “In light of the Easter shift and recent trends, we expect our April reported comparable-store sales results to be essentially flat to last year.”
Relative strength was seen in non-discretionary categories such as food, household product, baby and health care, while home and apparel continues to suffer with declining sales. When those categories begin to show some strength and Target reports positive monthly same-store sales a celebration will be in order, but don’t be fooled by April’s results, where the real possibility exists for the company to exceed its guidance given the cautious approach to its sales outlook.
New leadership named at Stop & Shop
QUINCY, Mass. Stop & Shop Supermarket has named Paula Price as CFO and Paula Labian as EVP human resources.
As CFO, Price will be responsible for the Finance, Strategy and Planning, and IT functions at Stop & Shop and Giant Food. Most recently, she served as SVP, Controller and Chief Accounting Officer for CVS/Caremark.
As EVP human resources, Paula Labian will play a key role in positioning Stop & Shop and Giant Food for the future. For the past six years, she served as chief human resources officer (CHRO) and global VP human resources for Whole Foods Market.