Pep Boys to be acquired in $791 buyout
Philadelphia — The Pep Boys — Manny, Moe & Jack, has agreed to be taken private by private equity firm The Gores Group for about $791 million. The total transaction, including debt, is valued at about $1 billion.
Under the terms of the buyout, the Los Angeles-based Gores Group will pay Pep Boys shareholders $15 a share, 24% above the closing price on Friday.
“Partnering with the Gores Group delivers a significant premium for Pep Boys’ shareholders and ensures a strong foundation for us to continue our expansion,” Michael R. Odell, the chain CEO and president, said in a statement. “Our board firmly believes that this transaction is in the best interests of all of our stakeholders.”
Odell and other senior managers, are expected to remain in their positions once the acquisitions closes.
Pep Boys’ board unanimously approved the acquisition, which still needs approval from the company’s shareholders. The transaction is expected to close in the fiscal second quarter. The agreement includes a provision, which allows Pep Boys to seek and receive alternative offers for a period of 45 days.
Pep Boys was founded in 1921 by Emanuel (Manny) Rosenfeld, Maurice (Moe) Strauss, Moe Radavitz and Graham (Jack) Jackson. It has more than 700 locations in 35 states and Puerto Rico.
Fred Meyer jewelry division goes mobile
PORTLAND, Ore. — Fred Meyer’s jewelry retail subsidiaries, Fred Meyer Jewelers and Littman Jewelers, which make up the third-largest fine jewelry retailer in the United States, have announced the launch of the Fredmeyerjewelers.com and Littmanjewelers.com mobile websites, optimized for mobile devices including iPhone and Android smartphones.
Developer Moovweb developed the mobile enabled sites for Fred Meyer toserve as a complement to the regular sites with functional e-commerce capability, according to the company. They have been designed to provide a robust shopping experience, including access to the company’s expansive jewelry assortment alongside options to purchase gift cards, access to a wish list and locating the nearest store.
"Fred Meyer Jewelers is committed to giving our Customers the ability to easily shop how and when they want. Our new mobile site puts the power into the hands of our on-the-go customers whether they want to buy online, find a store or are looking for detailed product information. Fred Meyer Jewelers is very excited to expand into the mobile channel to better address the needs of our increasing mobile audience," says Kirsten Darrow, VP marketing and e-commerce at Fred Meyer Jewelers.
In celebration of the launch, Fred Meyer Jewelers and Littman Jewelers are offering free two-day shipping on all orders through Feb. 14.
Sell more, lose more was Amazon’s Q4 motto
SEATTLE — Amazon.com enjoyed tremendous sales growth in the fourth quarter, but it came at a steep price as expenses grew faster than sales due to investments to support future growth.
Sales increased 35% to $17.4 billion during the quarterly period ended Dec. 31, 2011 from nearly $13 billion the same period the prior year and were aided by a slight ($101 million) tailwind related to currency exchange rates. Despite the surge in revenue, profit declined 58% to $177 million, or 38 cents a share, from a prior-year quarterly profit of $416 million, or 91 cents a share.
Amazon founder and CEO Jeff Bezos did not comment on the profitability decline in a press release announcing the company’s results, but did thank customers for embracing new products.
“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” Bezos said. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”
Bezos did not participate in the company’s 40-minute conference call Tuesday evening, and left CFO Tom Szkutak to highlight some of the company’s positive developments and investment philosophy.
“We are continually trying to improve all our processes and that includes delivery and fulfillment speed,” Szkutak said.
Accordingly, the company in 2011 added 17 new fulfillment centers to bring its global network to 69 centers and increased its number of employees by 67% to support growth and opportunities the company is fortunate to have, according to Szkutak.
“We feel that we are deploying capital appropriately,” Szkutak said, declining to elaborate on the level of investment the company plans to make expanding distribution capacity this year.
“You’ll have to stay tuned, and we’ll keep you updated as we go throughout the year,” Szkutak said in response to a question about how many fulfillment centers the company plans to open in 2012. “We are incredibly optimistic about the opportunity we have and that’s why we have invested the way we have.”
Those investments negatively affected full-year as well as fourth-quarter profits. For the full year, Amazon’s sales increased 41% to $48 billion compared with $34 billion in 2010, while net income decreased 45% to $631 million, or $1.37 per share, compared with net income of $1.15 billion, or $2.53 per share in 2010.