Mervyns to Slim Down
Haywood, Calif., Mervyns LLC plans to close 62 underperforming stores and lay off 4,800 workers as its streamlines operations and focuses its efforts on high-growth markets in the West and Southwest. The closings will leave the company with 193 stores in 10 states.
By February 2006, the chain will exit the Michigan and Oklahoma markets and parts of Texas, Colorado and Louisiana. It will also close a store in Oregan, one in Utah and one in Southern California, along with two distribution centers.
The stores slated for closure have not been profitable for years and are a significant drain on the company’s bottom line, Mervyns said. Although they comprise about 25% of all Mervyns stores, they represent only 17% of total sales.
Target Corp. sold Mervyns last year to a private-investment consortium.
Albertson’s 2Q Profit Smaller Than Expected
Boise, Idaho, Albertson’s Inc., which recently put itself on the selling block, posted a smaller-than-expected 3% gain in quarterly profit and said it would sell some property to cash in on the U.S. real estate boom.
Net profit rose to $107 million, or 29? a share, in the second quarter ended Aug. 4, vs. $104 million, or 28? a share, a year earlier. Total sales inched up to $10.2 billion from $10.17 billion a year ago. Same-store sales were down by 0.1%.
Albertson’s said capital spending would be between $1 billion and $1.1 billion this year, or $300 million less than it had originally expected, as it focuses on a smaller number of markets.
Feds Approve GameStop, Electronics Boutique Merger
Grapevine, Texas, The Securities and Exchange Commission (SEC) approved the proposed $1.4 billion merger of video-game retailers GameStop Corp. and Electronics Boutique Holdings Corp. The two companies will seek shareholder approval of the merger on Oct. 6.
The merger would give the combined company more than 3,200 stores in the United States and 600 internationally.