FINANCE

RadioShack reduces planned store closures

BY Dan Berthiaume

Fort Worth, Texas – RadioShack Corp. is scaling back its plans to close 1,100 stores. In a regulatory filing with the Securities and Exchange Commission (SEC), the retailer said its lenders are offering unacceptable terms for RadioShack to proceed with that many store closures. However, the company will still shutter a number of locations as part of its turnaround plan.

RadioShack’s existing credit agreement allows it to close only 200 stores per year and up to 600 over the life of the agreement (between now and 2018.). The company had been negotiating to increase that number to nearly double that number.

In a document filed with the SEC, RadioShack said that its lenders were demanding terms that it could not accept, which is why it is scaling back on its closings.

RadioShack made the following statement in its filing:

"RadioShack previously announced that it was seeking consent from its lenders under the 2018 Credit Agreement and 2018 Term Loan to pursue a program to close up to 1,100 stores. The terms on which the lenders are currently willing to provide this consent are not acceptable to the company. While the company may continue to have discussions with its lenders regarding the proposed store closure program, the company is continuing with a plan to close fewer stores and pursuing other cost reduction measures permitted under the existing terms of the 2018 Credit Agreement and 2018 Term Loan."

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FINANCE

Judge recommends Wal-Mart face shareholder suit

BY Dan Berthiaume

Bentonville, Ark. – U.S. Magistrate Judge Erin Setser has recommended that Wal-Mart Stores Inc. and former Wal-Mart CEO Mike Duke face a shareholder lawsuit alleging they concealed corrupt activities at Wal-Mart’s Mexican operation.

The suit, filed by a Michigan pension fund, claims Wal-Mart knew of bribery allegations involving its Wal-Mart de Mexico business in 2005 and conducted an internal investigation in 2005 and 2006, but never notified shareholders.

Setser’s recommendation is subject to a final decision by U.S. District Judge Susan Hickey, who does not have to follow it. Wal-Mart has not publicly commented on the matter.

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R.Mader says:
May-12-2014 07:28 pm

Gratuties
Stockholders cannot be too upset given the sales growth and stock appreciation since 2006. Sometimes gratuities are required to do business.

R.Mader says:
May-12-2014 07:28 pm

Stockholders cannot be too upset given the sales growth and stock appreciation since 2006. Sometimes gratuities are required to do business.

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FINANCE

Bebe shrinks net loss in Q3

BY Dan Berthiaume

Brisbane, Calif. – Bebe Stores Inc. reported a net loss of $24.3 million in the third quarter of fiscal 2014, an improvement from the net loss of $49.3 million recorded in the same quarter a year earlier.

However, net sales were $93.5 million, a decrease of 17.2% from $112.9 million for the third quarter a year ago.

Same-store sales for the quarter decreased 5.7%.

Bebe said the sales decrease was due partially to one fewer retail week in January in the current fiscal year coupled with the closure of 19 unproductive stores since the prior year third fiscal quarter. The company’s sales results were also negatively impacted by extreme weather throughout the quarter, with up to 136 weather-related temporary store closures. In addition, Bebe believes that the timing of Easter in late April had a greater-than-expected negative impact on sales in the quarter, specifically in the outlet locations.

Bebe plans to open one new outlet store and close one 2b Bebe store by the end of the fiscal year. The retailer expects flat same-store sales for the fourth quarter of fiscal 2014.

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