Icahn ‘Stands Ready’ to Buy Circuit City
Richmond, Va. Blockbuster’s largest shareholder announced Friday that he is prepared to buy Circuit City if Blockbuster cannot secure financing or shareholder approval for the acquisition.
Circuit City Stores revealed Friday that it received a letter from Blockbuster which indicated Carl Icahn “stands ready” to buy Circuit City on his own should Blockbuster not be able to make the deal.
In related news, Circuit City also said Friday it will allow Blockbuster to review its books in connection with the video-rental chain’s bid to buy the consumer electronics retailer.
In April, Blockbuster disclosed that it offered to acquire Circuit City for $6 to $8 a share in February. But Circuit City responded that while it was open to pursuing further talks, it was unwilling to let Blockbuster examine its books. The latest information represents a change of heart, as Circuit City is allowing Icahn and Blockbuster to conduct due diligence in connection with the proposed acquisition.
Circuit City has hired Goldman Sachs & Co. to explore strategic alternatives, which may include a sale. The board of directors, however, has not determined a specific path to pursue, according to the company.
JCPenney improves April comps
PLANO, Texas JCPenney reported a comparable-store sales decrease of 1.7% for the four weeks ended May 3, 2008, compared to guidance for sales to decrease mid- to high-single digits and compared to a 3.4% decrease last year. According to the company, sales benefitted in the month from more favorable weather trends in some regions of the country that boosted seasonal apparel sales, and customer response to promotional and clearance activities.
Total company sales for the month were $1.33 billion compared with $1.32 billion last year. The top performing merchandise divisions during the month were in apparel and family footwear, while fine jewelry and home categories continued to experience weaker sales. Geographically, the best performing regions of the country were the Northeast and Central regions.
Management’s guidance for the four-week period ending May 31, is for a mid-single digit decrease in comparable store sales, compared to a 0.9% decrease in last year’s May period.
Kohl’s reports strong April sales, raises outlook
MENOMONEE FALLS, Wis. Kohl’s reported that sales for the four-week period ended May 3, increased 12% to $1.3 billion from $1.1 billion last year. On a comparable-store basis, sales increased 3.5%.
Larry Montgomery, Kohl’s chairman and ceo, commented, “We were encouraged by the improvement in our sales performance in April as business in seasonal categories improved. We will be conservative in our inventory planning and expense management as we continue to expect our customers to be cautious in their spending.”
As a result of April’s performance, the company now expects earnings to exceed its previous guidance of 40 cents to 42 cents per diluted share.