Repositioning A.J. Wright for Future Growth: As part of the repositioning of A.J. Wright, the Company announced that it will close 34 of its 162 stores during January, 2007. These stores represent approximately 21% of A.J. Wright's store base, but only 16% of its year-to-date sales, and have profit contributions significantly below the balance of the chain.
In connection with this action, the Company expects to incur an estimated pre-tax charge of $62 million, which will reduce net income by $37 million, or $.08 per share in the fourth quarter of the current fiscal year ending January 27, 2007.
This charge represents costs the Company will incur related to asset impairment, remaining lease liability (net of expected subtenant income), and severance and other costs.
While net income will be reduced by an estimated $37 million, the cash cost of these closings is estimated to be approximately $17 million. Additionally, the Company expects to generate an incremental $5 million of cash through working capital reductions related to these closings (primarily inventory reductions).
20240830145952.gif)
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
