May 5, 2003,
Stein Mart to shutter 16 stores
Stein Mart, the Jacksonville, FL, off-price retailer last week said it will close 16 underperforming stores this year, about 6 percent of its current store base of 270 units.
Adding up store closing and severance costs, the chain said it will record a pre-tax charge of $19 million, or about $0.28 per share, during the year. The closings will also require about $10 million, or $0.15 per share, in additional markdowns to liquidate inventory in the affected stores.
"This is part of our initiative to improve not only individual store productivity, but the overall quality of the stores in our chain," said Michael Fisher, president and ceo.
The chain said location and "psychographic" issues — "fashion awareness in the marketplace" — were factors contributing to the stores' poor performance.
Three of the closings are under way or have been completed: in Richardson, TX, a Dallas suburb; Fayetteville, AR; and Greenfield, WI, a Milwaukee suburb. The other 13 locations have not been identified.
Dillard's sells stake in Texas centers
Dillard's Inc. said it is selling its interest in Brownsville, TX-based Sunrise Mall and its associated center, Sunrise Commons, to CBL & Associates Properties Inc. The sales price was $80.7 million, including the assumption of $40 million in Dillard's long-term debt.
The sale does not include the Dillard's store, which is an anchor at the center. Dillard's opened the 175,000-square-foot location at Sunrise Mall in July 2000, in connection with a renovation and expansion of the mall.
S&P boosts Bed Bath & Beyond credit rating
Standard & Poor's, one of the Big Three corporate credit rating agencies, has raised its corporate credit rating on Bed, Bath & Beyond to "BBB" from "BBB-," citing the stores "consistent operating performance and improving profitability and other credit protection measures."
S&P said it expects the retailer's high level of sales and profit growth "will continue, supported by the company's successful merchandising strategy and a favorable housing market," said Ana Lai, credit analyst.
"Amid slowing consumer spending, Bed Bath & Beyond continued to report strong sales and earnings growth through 2002 exceeding expectations," said S&P. "The company has historically achieved high sales and earnings increases through the organic growth of its store base, good execution and has consistently outperformed its competition. Its successful merchandising strategy and decentralized management structure have enabled Bed Bath & Beyond to generate above-average operating margins of more than 20 percent and strong return on capital at about 22 percent during the past three years."
Moody's boosts Dan River credit rating
Moody's Investors Service has raised its rating on Dan River Inc. following the completion of the diversified textile producer's refinancing.
Dan River's senior implied rating was upgraded to "B2" from "B3"; its senior unsecured issuer rating was upgraded to "B3" from "Caa1"; and a rating of "B3" was affirmed on $157 million worth of 12.75 percent unsecured notes due in April 2009.
Moody's said the refinancing "significantly improved Dan River's near-term liquidity by substantially reducing current maturities of long-term debt and positioned the company for future growth. Further, the upgrade reflects management's efforts and success in returning the company's margins and cash generation to more normalized levels in 2002 after a difficult 2001."
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