FINANCE

Private equity firm makes ‘best and final’ bid for Rent-A-Center

BY Marianne Wilson

Vintage Capital Management has upped its offer for Rent-A-Center.

Rent-A-Center confirmed it has received a proposal from the Florida-based private equity firm to acquire all outstanding shares of the rent-to-own retailer for $14.00 per share in cash. Last fall, Vintage made a $13.00 a share offer to acquire the company.

“As we have communicated on numerous occasions, we are committed to completing an acquisition of RCII as quickly as possible,” Vintage Capital stated, adding that its offer, which is described as its “best and final,” expires at 5 p.m. on June 15.

Rent-A-Center said its board, with the assistance of outside financial and legal advisors, is reviewing the Vintage offer “to determine the course of action that is in the best interest of the company and all its stockholders.”

“As previously announced, the board is prepared to enter into a transaction that it believes will achieve its objectives of maximizing value for stockholders and providing certainty of closing,” Rent-A-Center stated.

Rent-A-Center on Sunday said it had completed its strategic review process and had not received any proposals that met its objectives for a sale. Hours later, it issued another statement in which it said it had received an increased offer to buy the company from a previous bidder. But the retailer said the letter didn’t include financial commitment details for how a purchase would happen.

Rent-A-Center has been under pressure to go private from activist hedge fund Engaged Capital, which gained three seats on the company’s board last June.

Rent-A-Center owns and operates approximately 2,400 stores in the United States, Mexico, Canada and Puerto Rico, and approximately 1,250 Acceptance Now kiosk locations in the United States and Puerto Rico. Rent-A-Center Franchising International, a wholly owned subsidiary of the company, is a national franchiser of approximately 250 rent-to-own stores operating under the trade names of “Rent-A-Center,” “ColorTyme,” and “RimTyme.”

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Lands’ End starts year on strong note

BY Marianne Wilson

Specialty lifestyle retailer Lands’ End showed momentum in its first quarter, narrowing its loss and posting sales above expectations.

Lands’ End reported a net loss of $2.6 million, or 8 cents a share, for the period ended May 4, compared with a loss of $7.8 million, or 24 cents a share, in the year-ago period. The average per-share loss estimate of analysts was 17 cents.

Revenue rose 12% to $299.8 million, above the estimate of $285.0 million. Retail segment revenue declined 34% to $26.5 million, primarily due to there being few Lands’ End in-store shops at Sears stores. Same-store sales declined 18.9%.

In May, Lands’ End unveiled its updated store format, the first of four to six new locations the retailer is scheduled to open in 2018. The company, which has said it is not relying on Sears for future growth, reportedly plans to open between 40 to 60 locations during the next five years.

“Our first quarter results represent the fourth straight quarter of top line growth and third quarter of profitability growth, demonstrating the continued progress we have made across our strategic initiatives,” said Jerome S. Griffith, CEO and president. “We saw excellent growth in our uniform business with the successful launch of our Delta Airline business.”

Looking ahead, Griffith said, data analytics will remain “the driving force behind everything we do as a customer-centric organization.”

“As we further refine our product assortment, advance our digitally driven efforts, enhance our distribution network, and further elevate our infrastructure to support the business, we remain well positioned to achieve our long-term objectives,” he said.

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Nine West Holdings sells its footwear brands

BY Marianne Wilson

Nine West Holdings has sold its namesake and Bandolino businesses to Authentic Brand Group.

ABG bought the intellectual property of the two businesses on Monday at a bankruptcy auction for $340 million. Nine West Holdings filed for Chapter 11 bankruptcy protection in April, with a plan to sell the two brands to ABG as part of its reorganization plan. ABG’s winning bid is over $140 million more than its initial stalking horse bid.

“This was a highly competitive bidding process, which is a testament to the strength of these brands and we are thrilled that the outcome had ABG taking ownership of Nine West and Bandolino,” said Jamie Salter, chairman and CEO of ABG. “The addition of these two brands enhances ABG’s growing lifestyle portfolio, while launching our global footwear platform. We see incredible opportunity to expand the brands beyond footwear and handbags, specifically in the apparel and home categories as well as in new markets around the world.”

As part of the transaction, ABG assumes all licensing partnerships and marketing initiatives for the Nine West and Bandolino brands. The company appointed Marc Fisher Footwear to operate the footwear businesses.

“We are excited to expand our partnership with ABG and to help drive the global success of Nine West and Bandolino,” said Marc Fisher, founder and CEO, Marc Fisher Footwear. “As my father co-founded Nine West and Bandolino, I spent much of my footwear career working on these two brands. I am thrilled to have the opportunity to build great product that will resonate strongly with consumers and reinvigorate these brands in the marketplace.”

Nine West Holdings plans to revamp its capital structure around its profitable businesses, including Anne Klein, Kasper Group, The Jewelry Group and One Jeanswear Group. The company plans to exit bankruptcy court proceedings around September.

“Authentic Brands Group is an industry leader and we are pleased that they will bring the dedicated expertise and resources to manage the next stage in the life of two strong brands,” said Ralph Schipani, CEO of Nine West Holdings. “We are pleased to have completed this important step in our restructuring and are now focused on moving forward with the reorganization of our remaining businesses with the support of our key stakeholder groups.”

The sale, which is subject to approval by the Bankruptcy Court, is expected to be complete by July 15, 2018.

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