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Retail Ventures Still Ponders Value City Spinoff

Multi-format off-price retailer Retail Ventures (RVI) has made no decision on the fate of its general merchandise Value City division, the company said last week in its fourth-quarter and year-end earnings call.

RVI first announced this idea in late 2006, expecting to have an outcome within three to four months — but does not yet have an update. "We've been advised by our advisors not to comment on what we are doing," explained Heywood Wilansky, ceo. "We cannot talk about it until a finality of whatever is going to happen is prepared to be announced."

The company also did not discuss the first quarter or an outlook for 2007. Results for 2006, while less than stellar, showed incremental improvement: RVI reported a year-end net loss of $150.9 million, compared to $183.4 for the prior year. For the quarter, the loss was $35.9 million, compared to a loss of $71.1 million one year ago.

Sales for the year rose 5.3% to $3.07 billion and for the quarter rose 6.5% to $874.0 million. Comparable-store sales were up 0.8% for the year but fell 2.8% in the final quarter. The biggest problem was the 113-store Value City division, which saw a comp drop of 5.6% in the fourth quarter and a drop of 1.3% for the year. The 31-store Filene's Basement unit also edged into the negative zone with a comp drop of 1.3% for the quarter, but finished the year with comps up 3.1%.

RVI's footwear division, DSW (which operates 223 stores and supplies departments in 330 non-related retailer locations) continued to gain in importance, with comps up 1.0% in the quarter and 2.5% for the year. DSW has been the only profitable division for two years running.

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