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Liberty Media makes $1 billion bid for Barnes & Noble

BY CSA STAFF

New York City — Liberty Media Corp. has offered to buy Barnes & Noble in a deal valued at about $1 billion, which represents a 20% premium over the bookseller’s market value Thursday. Barnes & Noble said Thursday that the cash offer, which the Wall Street Journal called a “stunner,” is worth $17 a share.

The companies have yet to sign an agreement.

Liberty Media, based in Englewood, Colo., runs three publicly traded companies — Liberty Interactive, Liberty Starz Group and Liberty Capital Group — through which it runs home-shopping network QVC and movie channel operator Starz LLC and holds stakes in numerous other online, media and communications companies.

The offer from Liberty Media came with the condition that Barnes & Noble’s founding chairman Leonard Riggio stay with the company and continue owning its stock.

Ann Taylor tops estimates, raises view
New York City — Ann Inc., the operator of Ann Taylor and Loft stores, posted a 21% increase in its fiscal-first-quarter earnings and raised its full-year sales estimate.

For the quarter ended April 30, Ann reported a profit of $27.3 million, up from $22.62 million in the prior-year quarter.

Sales rose almost 10% to $523.6 million, but margins slipped to 57.3%, against 59% last year. Same-store sales rose 7.8%.

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Gap Inc. earnings suffer on higher cost of goods

BY CSA STAFF

SAN FRANCISCO — The rising cost of goods and a challenging economic environment took its toll on Gap Inc.’s first-quarter sales and earnings.Gap Inc. reported that net income for the firstquarter decreased 23% to $233 million compared with $302 million forthe first quarter last year. First quarter diluted earnings per share was 40 cents.

The company reported that net sales decreased 1% to $3.30 billion.Comparable sales, which includes associatedcomparable online sales, decreased 3%. The 3% comparable-store sales decline included a 3% decrease at Gap North America, a 1% decrease atBanana Republic North America, and a 2% decrease atOld Navy North America.

Because of the rising costs of goods Gap Inc. has revised its full year guidance. The company said it nowexpects product costs per unit to be up about20% in the back half of the year, which will more than outweigh retail price increases. The company has revised guidance for fiscal year 2011 diluted earnings per share to be in the range of$1.40 to $1.50.

“While we acknowledge that costing pressure is impacting our business, we’re working hard to navigatethis short-term macro challenge to our profitability in the current fiscal year,” said Glenn Murphy, chairmanand CEO of Gap Inc. “That said, our strategy remains the same – to deliver consistent,steady growth in North America while investing in our long-term global initiatives, especially in online andinternational.”

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Gap earnings fall 23% on soaring costs; CEO to focus turning around namesake division

BY CSA STAFF

San Francisco — Gap reported Thursday that its first-quarter earnings plummeted 23% as costs rose faster than expected, and the chain dramatically lowered its full-year earnings forecast.

Gap is spending about 20% more to produce each item than it did a year ago — a much faster rise than it expected, the Associated Press reported.

Gap’s net income was $233 million for the quarter ended April 30, compared with $302 million. The performance was slightly better than analysts expected, however.

In other Gap news, CEO Glen Murphy is turning his attention to getting the company’s ailing namesake brand on track, according to a report in the Wall Street Journal. Currently, Gap North America accounts for approximately a quarter of the company’s total revenue.

In his first interview since taking the reins at Gap in 2007, Murphy told the newspaper that his top priority with regards to Gap stores is fixing women’s shirts. Formerly a critical driver of sales, the category has suffered for quite some time.

According to the report, Murphy has spent most of the past few weeks in New York City with the Gap team, working to fill holes in the fall assortment which will hit stores in August. In early May, Gap announced that Patrick Robinson, the executive VP for Gap Global Design for Adult and Body, was being let go.

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