Safeway explores sale; reports net income jump from Canada exit
Pleasanton, Calif. – Safeway Inc. is exploring a sale of the company as it reports substantial increases in net income due to its exit from the Canadian market, and smaller increases in net sales for the fourth quarter and fiscal year 2014. Although the discussions for a sale are ongoing, the company said it has not reached an agreement on a transaction, and there can be no assurance that these discussions will lead to an agreement or a completed transaction.
However, media reports indicate that Cerberus Capital Management, CVC Capital Partners Ltd. and Leonard Green & Partners LP are among suitors involved in talks with Safeway. Leonard Green and CVC jointly own BJ’s Wholesale Club. Safeway is owned by KKR & Co. and in the past year has sold 72 Chicago-area locations of its Dominick’s Store brand and also divested its Canadian operations and launched an IPO of its Blackhawk Network Holdings gift card unit. Goldman Sachs is reportedly advising Safeway in its discussions.
In terms of fiscal performance, during the fourth quarter of fiscal 2014 Safe way reported net income of $3.31 billion, compared to only $244 million in the same quarter the prior year. Most of this increase came from a $3.2 billion gain on the disposal of its Canadian operations during the quarter. Net sales were $11.3 billion, up slightly from $11.2 billion. Same-store sales grew 1.6%.
During the full fiscal year, net income skyrocketed to $3.5 billion from $596 million and net sales increased slightly to $36.1 billion from $36 billion. Same-store sales grew 1.7%.
"We are pleased with the progress we made in 2013," said Robert Edwards, Safeway’s president and CEO. "Strategies to grow sales and improve operating profit dollars have begun to produce results. In 2013, we generated our best volume growth since 2006, and we had our best identical-store sales growth in the last five years. At the same time, we continue to pursue strategies to enhance momentum and increase shareholder value. We look forward to continuing progress in 2014."
EBay buys virtual fitting room provider Phisix
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San Jose, Calif. — EBay Inc. has acquired PhiSix, a computer graphics company that creates 3-D models of clothing from photos, pattern files and other sources and simulates the behavior of the garments. PhiSix’s technology allows consumers to see how clothes fit, look and move in different environments without actually having to try them on, and can be used in online and offline environments.
In a blog post, EBay said PhiSix technology may be utilized for omni-channel commerce so users can shop anytime, anywhere, from any device. EBay also said it believes it can integrate the PhiSix technology to power various online and physical store shopping experiences.
“PhiSix’s innovative technology can help solve one of the common problems online shoppers face – fit and look,” said EBay in the blog post. “With a virtual fitting room enabled by PhiSix technology, shoppers can determine fit with physically accurate simulations of the garments. The technology is able to recommend a size for the user’s body based on basic measurement inputs. All of this points to an immersive shopping experience that enables consumers to try on clothes virtually before buying online, which the company believes will reduce returns and enhance the overall shopping experience. PhiSix technology may be utilized for omni-channel commerce so users can shop anytime, anywhere, from any device.
“The technology could also be integrated across the entire eBay Inc. portfolio to enable a more immersive and compelling user experience so consumers can make informed choices whether at home or in a store.”
According to media reports, EBay hopes that PhiSix technology can help reduce the frequency of customer returns, and intends to deploy the solution both in stores and online by the end of 2014.
“This is an exciting opportunity for us to bring PhiSix’s expertise to one of the world’s leading commerce platforms,” said Jonathan Su, founder of PhiSix and a former Intel scientist. “We believe today’s acquisition will help us better scale our expertise and meet the needs of digitally-minded shoppers and create new customer experiences for the eBay Inc. portfolio.”
Financial terms were not disclosed.
HSN Inc. increases net income, sales during Q4 and fiscal 2013
St. Petersburg, Fla. – HSN Inc. reported gains in net income and sales during the fourth quarter and fiscal year 2013, compared to the same periods a year earlier. During the quarter, HSN Inc.’s adjusted net income increased 7% to $59.9 million from $56 million, while net sales increased 4% to $1.02 billion from $982.9 million.
For the full fiscal year, HSN Inc. reported adjusted net income of $173 million, up 15% from $153 million, and net sales of $3.4 billion, a 4% increase from $3.26 billion. Mindy Grossman, CEO of HSN Inc., credited strong digital and mobile sales growth for much of the company’s financial performance.
"Throughout 2013, we successfully managed the company to position us for long-term growth,” said Grossman. “We kept our focus on the customer, emphasized our unique content and proprietary products, strengthened our digital platform, further leveraged opportunities and synergies across the HSN and Cornerstone brands and returned value to our shareholders by delivering nearly $200 million through share repurchases and cash dividends. During the fourth quarter, we achieved 4% sales growth and a digital sales increase of 8%, including mobile growth of 59%.”