REAL ESTATE

Guitar Center to open Times Square flagship

BY Marianne Wilson

Los Angeles — Guitar Center will open a flagship in Manhattan’s Times Square on Aug. 7.

The store is located in the original New York Times building. Designed by Eight Inc., the space will offer a high-energy, hands-on environment in which customers are encouraged to interact with the wide selection of instruments and staff.

In addition, the store will feature an in-house lesson facility (Guitar Center Studios), free classes on recording, in-house rental department, a hands-on electronic music department, and onsite guitar repair service, called GC Garage.

Innovative features unique to the new location include a Fender custom shop where craftsmen will tailor guitars to unique specifications. Top-of-the-line, high-end luxury guitars will be showcased in the Platinum Club.

"Joining the caliber of retailers that have established a presence in Times Square over the years is a huge accomplishment and a statement as to how far the brand has come," said Mike Pratt, CEO, Guitar Center, which operates some 260 stores nationwide. "By opening a Guitar Center in such a visible, high-traffic area as Times Square, we are able to open more eyes to the inherent joy that comes from playing an instrument.”

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FINANCE

Report: RadioShack could be delisted

BY Marianne Wilson

New York — RadioShack has been notified by the New York Stock Exchange that it failed to satisfy listing standards and could be delisted after its average stock price stayed below $1 for 30 days, according to a document the company filed Friday with the Securities and Exchange Commission, the Dallas Business Journal reported.

RadioShack shares will continue to trade as usual on the NYSE. Under the exchange rules the troubled retailer has six months from the date of notification to regain compliance, or get its shares back above $1.

RadioShack said it will notify the NYSE that it intends to cure the issue and regain compliance.

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FINANCE

Dollar Tree, Family Dollar create juggernaut with $8.5 billion merger

BY Mike Troy

Chesapeake, Va. – In a merger that will shake up the dollar store retail vertical, Dollar Tree is acquiring Family Dollar for $8.5 billion in cash and stock. The resulting company will operate more than 13,000 locations in the U.S. and Canada, with an annual sales volume of $18 billion.

The deal was unanimously approved by the boards of both companies and involves Dollar Tree paying Family Dollar shareholders $59.60 in cash and $14.90 in equivalent Dollar Tree shares. Including debt, the deal is worth about $9.2 billion and comes in about 23% above Family Dollar’s closing stock market value on July 25.

“We will continue to operate under the Dollar Tree, Deals, and Dollar Tree Canada brands, and when this transaction is complete, we will operate under the Family Dollar brand as well,” said Dollar Tree CEO Bob Sasser. “Throughout our history, we have strived continuously to evolve and improve our business. This acquisition, which enhances our footprint and diversifies our company, will enable us to build on that progression, and importantly, positions Dollar Tree for accelerated growth. By offering both fixed-price and multi-price point formats and an even broader, more compelling merchandise assortment, we will be able to provide even greater value and choice to a wider array of customers.”

Sasser said the deal would extend the company’s reach to lower-income customers and strengthen and diversify its store footprint while also delivering significant synergies by leveraging the organizations' best practices. Dollar Tree anticipates that the transaction will result in $300 million of annual run-rate synergies to be fully realized by the end of the third year after closing.

Plans call for Family Dollar CEO Howard Levine to remain with the combined company, reporting to Sasser, and serving as a member of the board.

“For more than 54 years, Family Dollar has provided value and convenience to customers. Dollar Tree also has a rich history of providing great value to customers, and together, as one company, we can provide more customers with even greater value and convenience,” Levine said.

The deal is a culmination of a process that began last winter and included discussions of potential combinations with other partners, Levine said. The comprehensive review process ultimately determined the combination with Dollar Tree was in the best interest of shareholders.

“This combination will enable Family Dollar to accelerate efforts to improve the business and will benefit our dedicated team members who will now be part of a larger, more diverse organization,” Levine said. “I am excited about our future with Dollar Tree, and I look forward to working with the Dollar Tree team to complete the combination as quickly as possible to realize the compelling benefits for all our stakeholders.”

Activist investors Carl Icahn and Nelson Peltz, who had both acquired major stakes in Family Dollar, had been pushing the Family Dollar board to make a sale. The new company will have more North American stores than Wal-Mart.

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