News

New Kitchen e-commerce site opens

BY Staff Writer

Ocean Springs, Miss. – A new e-commerce site providing hanging kitchen pot racks and wall racks, HangingintheKitchen.com, opens today.

The site continually updates inventory and also offers social media pages on Twitter and Facebook that offer product reviews, special offers and tips.

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FINANCE

Best Buy abandons European strategy with Carphone Warehouse sale

BY Dan Berthiaume

Minneapolis — Consumer electronics retailer Best Buy is leaving the European market. The company is selling its stake in a joint European venture with U.K.-based consumer electronics retailer Carphone Warehouse Group PLC for cash and stock worth about $775 million USD.

Best Buy Co. will also pay Carphone 29 million pounds (about $45 million) related to existing agreements that will be terminated when the deal closes. The U.S. retailer also said that it will incur an approximately $200 million asset impairment charge related to the stake sale.

Best Buy says it is ending the agreement, launched in 2008, due to difficulties that both the company and the European economy have faced in recent years.

“After reviewing the business and spending time with our partners, we concluded that the timing and economics were right to enter into this agreement with CPW," said Hubert Joly, president and CEO of Best Buy.

The transaction allows Best Buy to simplify its business, improve its return on invested capital and strengthen its balance sheet, Joly added.

"Each international market is different and the sale of our European operations should not suggest any similar action in our other international businesses," said Joly.

Both companies’ boards approved the transaction, which still needs the approval of Carphone shareholders. The deal is targeted to close by the end of June.

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FINANCE

Office Depot reports Q1 loss

BY Dan Berthiaume

Boca Raton, Fla. — Office products retailer Office Depot reported a worse-than-expected first quarter net loss of $17 million, compared with net earnings of $41 million a year earlier, hurt by lower sales and costs related to its pending merger with OfficeMax. The company also said it would hold a special meeting with investors to seek approval for the merger.

Total sales decreased 5% to $2.72 billion. North American retail stores sales were down 6% to $1.1 billion, while same-store sales decreased 5%. International revenue decreased 8% to $759 million.

“Although our first quarter results were heavily impacted by the holiday timing, we saw a modest improvement in trends late in the period, which gives us confidence going into the second quarter and, ultimately, in achieving our full-year targets,” said Neil Austrian, chairman and CEO of Office Depot. “I’m also very pleased with the progress we have made on the merger over the past two months, especially the selection of Mike Newman, CFO of Office Depot, and Bruce Besanko, CFO of OfficeMax, to lead the integration efforts for the two companies.”

The Office Depot-OfficeMax merger, an estimated $1.2 billion deal, is awaiting approval by the Federal Trade Commission.

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