Retail Ventures Inc. (RVI, Financial) filed Amended Quarterly Report for the period ended 2009-08-01.
Retail Ventures, Inc., headquartered in Columbus, Ohio, is a leading off-price retailer with stores in the Midwest, Northeast and Southeast. Retail Ventures Inc. has a market cap of $380.2 million; its shares were traded at around $7.77 with and P/S ratio of 0.3.
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, will pay a fee of $1.3 million to Buxbaum, of which $0.4 million has been paid through August 1, 2009, 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 $75.9 million on the transaction as of August 1, 2009. 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 will provide transition services to Syms in exchange for payment.
Net Sales. Net sales for the three months ended August 1, 2009 increased $12.3 million, or 3.4%, to $369.5 million compared to $357.2 million for the three months ended August 2, 2008. The following table summarizes the increase in our net sales:
Gross Profit. Total gross profit increased $0.5 million from $158.7 million for the three months ended August 2, 2008 to $159.2 million for the three months ended August 1, 2009. Gross profit decreased, as a percent of net sales, from 44.4% for the three months ended August 2, 2008 to 43.1% for the three months ended August 1, 2009. The decrease in gross profit, as a percentage of sales, was primarily a result of a shift in clearance markdown activity related to mid-season promotional sales.
Change in Fair Value of Derivative Instruments. During the three months ended August 1, 2009 and August 2, 2008, the Company recorded a non-cash charge of $0.8 million and a reduction of expenses of $8.7 million, respectively, representing the changes in fair value of the Conversion Warrants and Term Loan Warrants. During the three months ended August 1, 2009 and August 2, 2008, a charge of $7.8 million and a reduction of expenses of $8.0 million, respectively, was recorded 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.
Net Sales. Net sales for the six months ended August 1, 2009 increased $31.9 million, or 4.4%, to $755.3 million compared to $723.4 million for the six months ended August 2, 2008. The following table summarizes the increase in our net sales:
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Retail Ventures, Inc., headquartered in Columbus, Ohio, is a leading off-price retailer with stores in the Midwest, Northeast and Southeast. Retail Ventures Inc. has a market cap of $380.2 million; its shares were traded at around $7.77 with and P/S ratio of 0.3.
Highlight of Business Operations:
On January 23, 2008, Retail Ventures disposed of an 81% ownership interest in its Value City Department Stores (Value City) business to VCHI Acquisition Co., a newly formed entity owned by VCDS Acquisition Holdings, LLC, Emerald Capital Management LLC and Crystal Value, LLC. Retail Ventures received no net cash proceeds from the sale, paid a fee of $500,000 to the purchaser, and recognized an after-tax loss of $76.2 million on the transaction as of August 1, 2009. As part of the transaction, Retail Ventures, Inc. issued warrants to VCHI Acquisition Co. to purchase 150,000 RVI common shares, at an exercise price of $10.00 per share, and exercisable within 18 months of January 23, 2008. The warrants expired in the quarter ended August 1, 2009. To facilitate the change in ownership and operation of Value City Department Stores, Retail Ventures agreed to provide or arrange for the provision of certain transition services principally related to information technology, finance and human resources to Value City Department Stores for a period of one year unless otherwise extended by both parties. On October 26, 2008, Value City filed for bankruptcy protection and announced that it would close its remaining stores. The Company negotiated an agreement with Value City to continue to provide services post bankruptcy filing, including risk management, financial services, benefits administration, payroll and information technology services, in exchange for a weekly payment. As of August 1, 2009, the Company is still providing Value City with limited transition services.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, will pay a fee of $1.3 million to Buxbaum, of which $0.4 million has been paid through August 1, 2009, 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 $75.9 million on the transaction as of August 1, 2009. 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 will provide transition services to Syms in exchange for payment.
Net Sales. Net sales for the three months ended August 1, 2009 increased $12.3 million, or 3.4%, to $369.5 million compared to $357.2 million for the three months ended August 2, 2008. The following table summarizes the increase in our net sales:
Gross Profit. Total gross profit increased $0.5 million from $158.7 million for the three months ended August 2, 2008 to $159.2 million for the three months ended August 1, 2009. Gross profit decreased, as a percent of net sales, from 44.4% for the three months ended August 2, 2008 to 43.1% for the three months ended August 1, 2009. The decrease in gross profit, as a percentage of sales, was primarily a result of a shift in clearance markdown activity related to mid-season promotional sales.
Change in Fair Value of Derivative Instruments. During the three months ended August 1, 2009 and August 2, 2008, the Company recorded a non-cash charge of $0.8 million and a reduction of expenses of $8.7 million, respectively, representing the changes in fair value of the Conversion Warrants and Term Loan Warrants. During the three months ended August 1, 2009 and August 2, 2008, a charge of $7.8 million and a reduction of expenses of $8.0 million, respectively, was recorded 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.
Net Sales. Net sales for the six months ended August 1, 2009 increased $31.9 million, or 4.4%, to $755.3 million compared to $723.4 million for the six months ended August 2, 2008. The following table summarizes the increase in our net sales:
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