West 49 to recognize non-cash, goodwill impairment charge
April 14, 2008 - Canada
West 49 Inc, Canada's leading action sport retailer, announced that as part of the Company's annual review for impairment of goodwill and intangibles in accordance with CICA Section 3062, it anticipates a $3.5 million, non-cash write-down of goodwill associated with its Off The Wall banner in the fourth quarter for the fiscal year ended January 26, 2008.
The Company operates 16 stores under the Off The Wall banner, mainly in western Canada. The Company expects to release its fourth quarter and year end results for fiscal 2008 on April 17, 2008.
This reduction is based on management assumptions and an in depth valuation conducted by a qualified, independent third party. The anticipated goodwill impairment does not affect the Company's day-to-day business operations or cash position.
"We are disappointed with our performance at Off The Wall and the delay in its turnaround," said Sam Baio, President and Chief Executive Officer of West 49 Inc. "In response, we have taken decisive action to liquidate older merchandise that was simply not turning. We are currently restocking the stores with more of the merchandise that is working well in this banner.
We continue to believe in the growth potential of Off The Wall and in its strategic fit within our Company. Our focus remains steadfast on properly executing the improved merchandising strategy for the banner, and we anticipate that the turnaround process already underway will soon yield positive comparable store sales and improved margins."
This news release has been reviewed by the Audit Committee of the Company.