Dover Saddlery Retail to open first New York store
Littleton, Mass. — Dover Saddlery Retail, a wholly owned subsidiary of Dover Saddlery, will open its first New York store, in Huntington (on Long Island), on April 19.
The store, which will evoke the look and feel of a premium equestrian stable, will feature an extensive range of riding apparel, tack and horse care supplies from all the leading brands. The location, as all Dover Saddlery stores, will offer helmet, boot and coat fittings as well as demo saddles for test rides in a wide selection of models.
Best Buy tops Street as Q4 loss narrows; buyout talks with founder Schulze end
Minneapolis — Best Buy Co. said that its loss narrowed in the fourth quarter, helped by improved U.S. sales. In a separate release, the company said that the deadline passed without it having received an acquisition offer from its co-founder, Richard Schulze, who had been considering making a bid for the chain.
“The company received no such offer and will continue to focus on its transformation for the benefit of all of its stakeholders,” Best Buy said in a statement.
A report by Reuters said that Best Buy spurned a $1 billion minority investment proposal by Schulze’s three private equity partners: Leonard Green Partners, Cerberus Capital Management and TPG Capital. Under the proposal, the three firms would have each received a seat on the board, the report said.
Best Buy reported a loss (after paying preferred dividends) of $409 million for the three months ended Feb. 2. The loss was less than Wall Street had expected, and its shares rose more than 5% in premarket trading on Friday.
Revenue was nearly flat at a better-than-expected $16.71 billion, from $16.67 billion last year. Analysts expected $16.29 billion.
“These results were driven by a compelling assortment of new products in key growth categories, increased “blue-shirt” training and higher customer engagement in our retail stores, and impactful ‘traffic-generating’ marketing activities," said Hubert Joly, Best Buy president and CEO.
Same-store sales at U.S. stores in the quarter rose 0.9%, boosted by performance from Best Buy’s freestanding mobile stores. International revenue in stores open at least one year fell 6.6% on weak results in Canada and China.
For its current fiscal year, Joly said the chain would pursue six priorities: accelerating online growth; escalating the multichannel customer experience; increasing revenue and gross profit per square foot through enhanced store space optimization and merchandising; driving down cost of goods sold through supply chain efficiencies; continuing to gradually optimize the U.S. real estate portfolio; and further reducing SG&A costs.
“In addition, we will focus on driving operational improvements in our International business,” Joly said.
To support its initiatives, the chain expects capital spending be in the range of $700 to $800 million and incremental SG&A investments in the range of $150 to $200 million. These investments will be principally in the areas of online, mobile and the multichannel customer experience, in addition to non-recurring costs associated with the insourcing of IT, which is expected to be completed this year.
For the year, Best Buy reported a loss of $249 million, compared with a loss of $1.32 billion in the prior year. Revenue edged down less than 1% to $49.62 billion from $50.04 billion.
Best Buy’s not singing the blues
Fourth quarter same store sales inched up 0.9% at Best Buy and profits were better than expected as the company fared better during the holiday season than many thought.
Fourth quarter revenue increased slightly to $16.7 billion for the 13 week period ended February 2, and the company reported adjusted earnings per share of $1.64 compared to $2.18 the prior year. The company also said adjusted free cash flow totaled $965 million thanks to aggressive inventory reductions.
"These results were driven by a compelling assortment of new products in key growth categories, increased ‘blue-shirt’ training and higher customer engagement in our retail stores, and impactful ‘traffic-generating’ marketing activities," said Best Buy president and CEO Hubert Joly. "It was a quarter that was driven, not given and we are encouraged by the intensity, collaboration and momentum that was generated by both our front line and corporate teams as we began to execute against our Renew Blue initiatives."
While the meager comp increase was better than expected heading into the holiday season, it comes against a weak prior year comparison when comps declined 1.1%. Accordingly, Joly noted that the company is intently focused on stabilizing and improving comps and increasing profitability across its global businesses during the current year.
"We recognize, however, that fiscal 2014 is a year of transition and that further investment will be required to advance our Renew Blue transformation," Joly said.
Renew Blue is the name the company gave to six strategic priorities that include: accelerating online growth; escalating the multi-channel customer experience; increasing revenue and gross profit per square foot through enhanced store space optimization and merchandising; driving down cost of goods sold through supply chain efficiencies; continuing to gradually optimize the U.S. real estate portfolio; and further reducing expenses.
The company didn’t provide first quarter or full year financial guidance, but did say directionally it expects there to be significant pressure during the first quarter. CFO Sharon McCollam said despite the financial pressures Best Buy is experiencing inspiring energy around its Renew Blue strategy.
"Our fourth quarter results and the actions that we have taken since then to begin rationalizing our infrastructure, have given the organization something that they have not had in a long time – pride in the outcome and belief in what is possible," McCollam said.