Sycamore Partners seeks to acquire Express
Columbus, Ohio — Express Inc. confirmed that it has received a letter from Sycamore Partners, which has a 9.9% stake in the retailer, indicating that the private equity firm is interested in acquiring the company. In response, Express adopted a one-year “poison pill” shareholder rights plan that would double its shares of common stock in the event any stockholder acquires 10% or more of the company.
“Given the strategic and operational challenges faced by specialty retailers generally and the company in particular, a fully financed, binding, all-cash offer to acquire the company would be a valuable alternative for the company’s board of directors and stockholders to consider,” Stefan Kaluzny, Sycamore’s managing director, said in the letter.
Express said the shareholder rights plan exists to protect the interests of stockholders and give the board the chance to react to takeover attempts, rather than prevent a sale. The chain has established special committee of the board to determine a course of action it believes is in the "best interest" of all stockholders.
Express is coming off a rough first quarter during which its sales dropped to nearly $461 million from roughly $509 million in the same period a year prior. Same-store sales plunged 11%. Operating income was almost $15 million, a steep drop from nearly $59 million for the same period a year prior.
Sycamore, founded in 2011 by two executives from venture capital firm Golden Gate Capital, owns Hot Topic and Talbots and also owns a stake and credit in Aeropostale.
California drought and Easter shift affect 99 Cents Only’s Q1 comps
The drought’s effect on fresh produce in California and the timing of this year’s Easter holiday adversely affected 99 Cents Only Stores’ comparable-store sales in the first quarter of fiscal 2015.
Same-store sales decreased 0.5%, calculated on a comparable 13-week period of the prior year. The company reported net sales of $477.9 million, an increase of 7% from $445.2 million in the first quarter of fiscal 2014.
Because the company changed its fiscal year to be in line with its peers in the retail industry, its calculation for same-store sales was based on stores that have been opened for at least 14 months — including stores that have been remodeled, expanded or relocated during that period — rather than on stores that have been open or reopened for 15 months.
"We have been pleased with the substantial progress made on implementation of our strategic plan during the quarter," said CEO Stephane Gonthier. "We continue to be excited about the sales and margin opportunities available in the near- to medium-term through direct sourcing and our initiative to raise shelf heights across the chain."
Net income was $9.6 million in the quarter compared to net income of $0.9 million for the first quarter of fiscal 2014.
During the quarter, the company opened three net new stores. As of the quarter’s close, the company operated 346 stores, an increase of 9.5% in store count over last year.
GNC CFO resigns
Pittsburgh — Michael M. Nuzzo, executive VP and CFO of GNC Holdings Inc., is resigning in order to accept an executive position at an unspecified private equity-funded consumer products company. Nuzzo will remain with GNC at least through July 18, 2014, which will include preparation of its second quarter 2014 earnings release and 10Q.
"Since joining us in 2008, Mike has been instrumental in leading the company through a number of growth initiatives, building the foundation for its transition to a public company, and instituting a disciplined capital structure,” said Joe Fortunato, chairman, president & CEO of GNC. “I would like to thank Mike for his leadership and dedication, and wish him all the best in his new endeavor.”