Retail Ventures Inc. (RVI, Financial) filed Quarterly Report for the period ended 2010-07-31.
Retail Ventures Inc. has a market cap of $443.2 million; its shares were traded at around $9.04 with a P/E ratio of 8 and P/S ratio of 0.3. RVI is in the portfolios of Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Change in Fair Value of Derivative Instruments. During the second quarter of fiscal 2010 and fiscal 2009, the Company recorded a non-cash reduction of expense of $4.6 million and a non-cash charge of $0.8 million, respectively, relating to the changes in fair value of the warrants. During the second quarter of fiscal 2010 and fiscal 2009, the Company recorded a non-cash reduction of expense of $12.6 million and non-cash charge of $7.8 million, respectively, related to the change in the fair value of the conversion feature of the PIES. The change in the fair value of the derivatives is primarily due to the changes in the RVI and DSW stock prices.
Selling, General and Administrative Expenses. Selling, general and administrative (SG&A) expenses decreased $58.2 million from $366.3 million in the six months ended August 1, 2009 to $308.1 million in the six months ended July 31, 2010. SG&A expense decreased, as a percentage of net sales, from 48.5% for the six months ended August 1, 2009 to 35.6% for the six months ended July 31, 2010.
Corporate segment SG&A expense decreased $62.5 million for the second quarter of fiscal 2010 compared to the second quarter of fiscal 2009. The decrease in SG&A expense was primarily due to a reduction of bad debt expense of $2.7 million during the first quarter of fiscal 2010 due to an initial distribution from the debtors estates, compared to an increase in bad debt expense of $57.3 million during the first quarter of fiscal 2009 recorded against the notes and accounts receivable from Filenes Basement due to the bankruptcy filing of Filenes Basement on May 4, 2009.
Change in Fair Value of Derivative Instruments. During the six months ended July 31, 2010 and August 1, 2009, the Company recorded a non-cash charge of $3.1 million and $0.9 million, respectively, related to the change in fair value of the warrants. During the six months ended July 31, 2010 and August 1, 2009, the Company recorded a non-cash charge of $11.1 million and $9.2 million, respectively, related to the change in the fair value of the conversion feature of the PIES. The change in the fair value of the derivatives is primarily due to the changes in the RVI and DSW stock prices.
The operating loss for the Corporate segment decreased $58.5 million to an operating loss of $13.9 million for the six months ended July 31, 2010 from operating loss of $72.4 million for the six months ended August 1, 2009. The decrease in operating loss for the Corporate segment was primarily the result of a reduction of bad debt expense of $2.7 million during the first quarter of fiscal 2010 due to an initial distribution from the debtors estates compared to an increase in bad debt expense of $57.3 million during the first quarter of fiscal 2009 recorded against the notes and accounts receivable from Filenes Basement due to the bankruptcy filing of Filenes Basement on May 4, 2009.
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Retail Ventures Inc. has a market cap of $443.2 million; its shares were traded at around $9.04 with a P/E ratio of 8 and P/S ratio of 0.3. RVI is in the portfolios of Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
On April 21, 2009, Retail Ventures disposed of Filenes Basement, Inc. and certain related entities to FB II Acquisition Corp., a newly formed entity owned by Buxbaum Holdings, Inc. (Buxbaum). Retail Ventures did not realize any cash proceeds from this transaction, agreed to pay a fee of $1.3 million to Buxbaum, which has been paid through July 31, 2010, and has reimbursed $0.4 million of Buxbaums costs associated with the transaction. Retail Ventures has also agreed to indemnify Buxbaum, FB II Acquisition Corp. and their owners against certain liabilities. Retail Ventures has recognized an after-tax gain of $84.9 million on the transaction as of July 31, 2010. On May 4, 2009, Filenes Basement filed for bankruptcy protection. On June 18, 2009, following bankruptcy court approval, SYL LLC, a subsidiary of Syms Corp (Syms), purchased certain assets of Filenes Basement. All references to liquidating Filenes Basement refer to the debtor, formerly known as Filenes Basement Inc., and its debtor subsidiaries remaining after the asset purchase by a subsidiary of Syms. All references to New Filenes Basement refer to the stores operated by Syms. The Company negotiated with Syms to provide transition services in exchange for payment and substantially all transition services being provided concluded during the quarter ended July 31, 2010. On September 25, 2009, RVI and DSW entered into a settlement agreement with liquidating Filenes Basement and its related debtors and the Official Committee of Unsecured Creditors appointed in the Chapter 11 case for the debtors. On November 3, 2009, the settlement agreement was approved by the Bankruptcy Court for the District of Delaware. As a result of the courts approval of the settlement agreement, RVIs claims in respect of $52.6 million in notes receivable from liquidating Filenes Basement were released; RVI assumed the rights and obligations related to (and agreed to indemnify liquidating Filenes Basement with regard to certain matters arising out of) the liquidating Filenes Basement defined benefit pension plan; and liquidating Filenes Basement and the creditors committee agreed to allow certain general unsecured claims for amounts owed to RVI and DSW.Change in Fair Value of Derivative Instruments. During the second quarter of fiscal 2010 and fiscal 2009, the Company recorded a non-cash reduction of expense of $4.6 million and a non-cash charge of $0.8 million, respectively, relating to the changes in fair value of the warrants. During the second quarter of fiscal 2010 and fiscal 2009, the Company recorded a non-cash reduction of expense of $12.6 million and non-cash charge of $7.8 million, respectively, related to the change in the fair value of the conversion feature of the PIES. The change in the fair value of the derivatives is primarily due to the changes in the RVI and DSW stock prices.
Selling, General and Administrative Expenses. Selling, general and administrative (SG&A) expenses decreased $58.2 million from $366.3 million in the six months ended August 1, 2009 to $308.1 million in the six months ended July 31, 2010. SG&A expense decreased, as a percentage of net sales, from 48.5% for the six months ended August 1, 2009 to 35.6% for the six months ended July 31, 2010.
Corporate segment SG&A expense decreased $62.5 million for the second quarter of fiscal 2010 compared to the second quarter of fiscal 2009. The decrease in SG&A expense was primarily due to a reduction of bad debt expense of $2.7 million during the first quarter of fiscal 2010 due to an initial distribution from the debtors estates, compared to an increase in bad debt expense of $57.3 million during the first quarter of fiscal 2009 recorded against the notes and accounts receivable from Filenes Basement due to the bankruptcy filing of Filenes Basement on May 4, 2009.
Change in Fair Value of Derivative Instruments. During the six months ended July 31, 2010 and August 1, 2009, the Company recorded a non-cash charge of $3.1 million and $0.9 million, respectively, related to the change in fair value of the warrants. During the six months ended July 31, 2010 and August 1, 2009, the Company recorded a non-cash charge of $11.1 million and $9.2 million, respectively, related to the change in the fair value of the conversion feature of the PIES. The change in the fair value of the derivatives is primarily due to the changes in the RVI and DSW stock prices.
The operating loss for the Corporate segment decreased $58.5 million to an operating loss of $13.9 million for the six months ended July 31, 2010 from operating loss of $72.4 million for the six months ended August 1, 2009. The decrease in operating loss for the Corporate segment was primarily the result of a reduction of bad debt expense of $2.7 million during the first quarter of fiscal 2010 due to an initial distribution from the debtors estates compared to an increase in bad debt expense of $57.3 million during the first quarter of fiscal 2009 recorded against the notes and accounts receivable from Filenes Basement due to the bankruptcy filing of Filenes Basement on May 4, 2009.
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