Apparel retailer TJX announces sale of Bob's Stores
20 Aug '08
3 min read
The TJX Companies Inc, the leading off-price retailer of apparel and home fashions in the U.S. and worldwide, announced that it has sold Bob's Stores to private equity firms Versa Capital Management and Crystal Capital. Terms of the sale were not disclosed.
Carol Meyrowitz, President and Chief Executive Officer of The TJX Companies, Inc., stated, “While we continue to believe Bob's Stores has great potential and an excellent organization, our decision to sell the business reflects our vision to grow TJX as a global, off-price company.
We believe that focusing on the significant opportunities to expand the domestic and international presence of our core, off-price concepts is the right strategy for us at this time. Bob's Stores has made a great deal of progress in improving its comparable store sales, operating results and cash flow over the past two years. We are sincerely grateful for the hard work and commitment of the Bob's Stores team, and we wish them much future success.”
Financial Impact of Sale/Reclassification of Bob's Stores to Discontinued Operations: The Company will record an after-tax loss in its Fiscal 2009 third quarter of approximately $15 million, or $.03 per share, from the sale of Bob's Stores, which will be reported as a loss from discontinued operations. In the third quarter and going forward, historical results will also be adjusted to reflect the Bob's Stores business segment as discontinued operations.
Accordingly, the loss on the sale and the operating losses related to Bob's Stores will not impact results from continuing operations. The sale is expected to generate cash proceeds of approximately $23 million, which primarily represents anticipated tax benefits, as well as the proceeds from the sale, partially offset by fees and expenses related to the transaction.
Updated Guidance: As a result of this sale and reclassification of Bob's Stores to discontinued operations, the Company is updating its guidance to reflect income from continuing operations, which will exclude the impact of the sale of Bob's Stores and its operating results.
The Company's guidance for the third and fourth quarter for diluted earnings per share from continuing operations is unchanged from the guidance for diluted earnings per share previously issued in the Company's 8/12/08 press release.
However, the Company now expects full year Fiscal 2009 diluted earnings per share from continuing operations to be in the range of $2.30 to $2.35, which represents an increase over prior guidance for diluted earnings per share due to the reclassification of Bob's Stores results to discontinued operations.
Full year guidance for diluted earnings per share from continuing operations for the current fiscal year includes an expected $.09 per share benefit from the 53rd week in the Company's Fiscal 2009 fourth quarter as well as $.02 per share of unanticipated tax-related adjustments recorded in the first quarter of Fiscal 2009.