Everbright to invest in Gottschalks
FRESNO, Calif. Gottschalks announced that it has signed a definitive agreement for up to a $30 million investment in the company by Everbright Development Overseas, a British Virgin Islands corporation, as well as a strategic business partnership to establish direct sourcing and consignment product sales at Gottschalks and launch a new wholesale business.
Under the terms of the definitive agreement, in addition to Everbright’s investment in the company, Gottschalks will receive all of the issued and outstanding capital stock, trademarks, patents and licenses of Everbright Asia Limited, a British Virgin Islands corporation, and will establish a new wholesale business from which Gottschalks will receive all profits.
Under the terms of the definitive agreement, Everbright’s investment will consist of a $15 million acquisition of newly-issued shares of Gottschalks common stock, a capital call of up to $15 million in the form of a capital contribution or loan that will be used for additional support to fund the Company’s credit facility, the potential to acquire additional shares of Gottschalks common stock based upon a pre-tax income threshold, and warrants to acquire additional shares of Gottschalks common stock.
Jim Famalette, chairman and ceo of Gottschalks, stated, “We are very pleased to have reached this definitive agreement with Everbright. At the closing of the transaction, the new investment will serve to strengthen our financial position. This strategic business partnership will enable us to leverage Everbright’s international sourcing network to enhance our operations and also provide our customers with new quality products at very attractive price points. In addition, we would be able to launch and test an expanded merchandise assortment with very limited risk as select manufacturers utilize our stores to provide consignment products. Further, we expect this agreement will allow us to diversify our traditional business model with more direct business to business, and direct to consumer product sales from the network through our relationship with Everbright. Taken together, we anticipate our partnership with Everbright will support our long- term growth initiatives, allow the company to diversify its business model, and have a positive impact on our results over time.”
Barnes & Noble posts 3Q loss, lowers outlook
NEW YORK Barnes & Noble reported sales for the third quarter of $1.1 billion, a 4.4% decrease compared to the prior year. Barnes & Noble store sales decreased 4.4% to $971 million, with comparable-store sales decreasing 7.4% for the quarter.
The third quarter net loss was $18.4 million or 34 cents per share.
“A significant drop off in customer traffic and consumer spending impacted our business in the third quarter,” said Steve Riggio, ceo of Barnes & Noble. “In a challenging environment with a comparable-store sales decline of 4.6% this year, the company has aggressively managed expenses to operate profitably. Furthermore, the company is taking measures to reduce expenses for the balance of this year and next.”
For the fourth quarter, the company expects comparable-store sales at Barnes & Noble stores to decline 6% to 9%. Fourth quarter earnings per share is expected to be in a range of $1.40 to $1.70. For the full year, the company now expects comparable-store sales at Barnes & Noble stores to decline 5% to 6%. Full year earnings per share is expected to be in a range of $1.30 to $1.60, compared to previous guidance of $1.70 to $1.90.
Dollar General pushes back Thanksgiving sales
GOODLETTSVILLE, Tenn. Dollar General announced that it will offer holiday deals a full weak ahead of the traditional Thanksgiving holiday shopping weekend.
Starting the Sunday before Thanksgiving, customers will find special savings on items such as DVD players, holiday decorations and gaming systems.
Promotions will continue during the Thanksgiving weekend with deals on cell phones, jeans and MP3 players.