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Lifetime Brands to close 30 outlet stores
04 Dec '07
4 min read
Lifetime Brands Inc North America's leading resource for nationally branded kitchenware, tabletop and home décor products, will close 30 underperforming outlet stores.
The Company also announced that it has completed the sale of its former headquarters building, is opening a new West Coast distribution center and that its Board of Directors authorized an increase in the amount of the Company's stock repurchase program.
Lifetime plans to close 27 Farberware outlet retail stores and three Pfaltzgraff factory stores. The stores that will close are projected to generate losses on an annual basis.
The Company has entered into an agreement with Gordon Brothers Retail Partners LLC to manage and operate inventory clearance sales at those locations, which will begin tomorrow, Tuesday, December 4, 2007, and are expected to be completed by the end of the first quarter 2008.
Lifetime has also entered into an agreement with RCS Real Estate Advisors with respect to terminating the leases for the affected stores. Following these store closings, the Company will continue to operate 37 Pfaltzgraff stores and nine Farberware stores, as well as the Pfaltzgraff catalog business.
The Company estimates it will record pre-tax charges related to these store closings of up to $2.0 million, equal to net income (loss) of approximately ($0.08) per diluted share, in 2007, primarily representing non-cash write-downs of retail store fixed assets; and up to $5.0 million, equal to net income (loss) of approximately ($0.19) per diluted share in 2008.
The foregoing estimates do not take into account the results of the inventory clearance sales or, for 2008, any mitigation of its store lease obligations. In addition to lease termination expense and the write-downs of fixed assets, the charges will include the costs of retention bonuses, severance payments and other expenses.
As a result, the Company now expects diluted earnings per share for 2007 to be between $1.02 and $1.12, as compared to diluted earnings per share of $1.14 in 2006.
Jeffrey Siegel, Lifetime's Chairman, President and Chief Executive Officer said, “While we are very pleased with the progress that our Direct to Consumer management team has made in revitalizing our retail stores, we determined that certain locations do not have the potential to show meaningful profits and should be closed.
The Company also announced that it has completed the sale of its former headquarters building, is opening a new West Coast distribution center and that its Board of Directors authorized an increase in the amount of the Company's stock repurchase program.
Lifetime plans to close 27 Farberware outlet retail stores and three Pfaltzgraff factory stores. The stores that will close are projected to generate losses on an annual basis.
The Company has entered into an agreement with Gordon Brothers Retail Partners LLC to manage and operate inventory clearance sales at those locations, which will begin tomorrow, Tuesday, December 4, 2007, and are expected to be completed by the end of the first quarter 2008.
Lifetime has also entered into an agreement with RCS Real Estate Advisors with respect to terminating the leases for the affected stores. Following these store closings, the Company will continue to operate 37 Pfaltzgraff stores and nine Farberware stores, as well as the Pfaltzgraff catalog business.
The Company estimates it will record pre-tax charges related to these store closings of up to $2.0 million, equal to net income (loss) of approximately ($0.08) per diluted share, in 2007, primarily representing non-cash write-downs of retail store fixed assets; and up to $5.0 million, equal to net income (loss) of approximately ($0.19) per diluted share in 2008.
The foregoing estimates do not take into account the results of the inventory clearance sales or, for 2008, any mitigation of its store lease obligations. In addition to lease termination expense and the write-downs of fixed assets, the charges will include the costs of retention bonuses, severance payments and other expenses.
As a result, the Company now expects diluted earnings per share for 2007 to be between $1.02 and $1.12, as compared to diluted earnings per share of $1.14 in 2006.
Jeffrey Siegel, Lifetime's Chairman, President and Chief Executive Officer said, “While we are very pleased with the progress that our Direct to Consumer management team has made in revitalizing our retail stores, we determined that certain locations do not have the potential to show meaningful profits and should be closed.
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