Pacific Sunwear 3Q Profit Drops
Anaheim, Calif., Pacific Sunwear of California said Thursday third-quarter net income declined 78%, weighed down by charges and a comp-store sales decline. Net income for the quarter ended Oct. 28 fell to $9 million, from $40.5 million during the same period last year. Comp-store sales fell 6.7%, while revenue edged down less than 1% to $375.4 million from $377.5 million last year.
“Although we are deeply disappointed with our third-quarter results, we are moving aggressively in an effort to reverse the trend,” said interim CEO Sall Frame Kasaks, adding the company is taking steps to reduce overall inventory density in its stores.
Judge Rules Winn-Dixie Can Exit Chapter 11
Jacksonville, Fla., Afederal judge ruled Thursday that Winn-Dixie Stores has met the legal requirements to emerge from more than a year of bankruptcy protection, and the company plans to do so within 30 days. U.S. Bankruptcy Judge Jerry Funk’s decision came after creditors approved the plan last month. The company will emerge from Chapter 11 reorganization once it receives $725 million in exit financing from Wachovia Corp., issues new stock and installs its new board of directors.
The company plans to emerge from bankruptcy, probably in early December, with sufficient financing and liquidity to make investment in its current stores and develop new stores. The company says it will have only a minimal amount of long-term debt on its balance sheet.
The reorganization plan establishes 21 classes of claimants and gets rid of current Winn-Dixie stock. The company plans to issue 50 million shares of stock to cover an estimated $985 million in unsecured claims, according to the plan.
The reorganization plan projects the company will return to profitability beginning in its next fiscal year that starts in June. Winn-Dixie has reported losses of almost $1.3 billion over the past three years.