FACTORY 2-U STORES, INC. Announces Restructuring Initiatives.Business Editors SAN DIEGO--(BUSINESS WIRE)--Dec. 6, 2002 FACTORY 2-U Factory 2-U is a chain of department stores that are located mostly in the Western United States selling clothing, domestics, and merchandise, founded in 1962, originally private owned. They have 6000 employees with more than 10 stores. STORES, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (Nasdaq:FTUS FTUS Full-Time Unit Support ) today announced initiatives to improve operating results. These initiatives include the closure of 23 under-performing stores of which 12 will be closed immediately and 11 will be closed during Fiscal 2003. Six of these store closures represent a decision not to renew expiring leases. The Company will liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the inventory in conjunction with the store closures and a reduction of inventory levels chain-wide. As a result of the planned reduction in the store base and the April 2003 opening of a 600,000 square foot distribution center in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. , CA, the Company plans to consolidate both its distribution center network and corporate overhead structure. The Company estimates these initiatives will result in approximately $5.0 million in cost savings in Fiscal 2003. In addition, the Company has had favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. experience related to the cost of closing the previously announced 28 stores. As a result, the Company intends to reduce its current reserves for those store closings by $5.0 million for the fourth quarter ending February 1, 2003. These restructuring initiatives and the reduction in the Company's prior year store closure reserve are anticipated to result in after-tax charges of approximately $13.2 million ($6.9 million non cash), or $1.02 per share, in the fourth quarter ending February 1, 2003. Bill Fields, Chairman and Chief Executive Officer, commented, "These actions are necessary to allow us to improve operating results and offer better values to our customers. We will also reduce our inventory levels and change inventory mix and content. Our inventory liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy efforts should improve inventory turns and ultimately improve the shopping experience in our stores. We have already begun to aggressively execute these initiatives, which we intend to serve as a foundation for future growth." We will provide a mid-month sales update for December on December 23, 2002 at 5:00 P.M. Eastern Standard Time. Those interested can access this update message at 1-888-201-9603. This message will remain available until January 20, 2003. We will release our December sales results on January 8, 2003 after the market closes, or approximately 4:00 P.M. Eastern Standard Time. We expect to release our fourth quarter operating results on February 26, 2003 after the market closes, or approximately 4:00 P.M. Eastern Standard Time. We will host a real-time webcast presentation and live conference call to discuss our fourth quarter operating results and fiscal 2003 sales and operating results expectations, the same day at 5:00 P.M. Eastern Standard Time. To participate in the call, dial 1-800-843-7949 five minutes before the call or access the Internet at www.factory2-u.com. All shareholders and other interested parties are encouraged to participate. A replay of the call will remain available for 48 hours by telephone or on the Internet through March 12, 2003. You may also obtain a transcript of the call by contacting Kehoe, White & Co., Inc. at 1-562-437-0655. FACTORY 2-U STORES, INC. operates 261 "Factory 2-U" off-price retail stores which sell branded casual apparel for the family, as well as selected domestics and household merchandise at prices which generally are significantly lower than the prices offered by its discount competitors. The Company operates 34 stores in Arizona, 3 stores in Arkansas, 64 stores in southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , 63 stores in northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern , 1 store in Idaho, 5 stores in Louisiana, 3 stores in Missouri, 8 stores in Nevada, 9 stores in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , 2 stores in Oklahoma, 15 stores in Oregon, 2 stores in Tennessee, 36 stores in Texas, and 16 stores in Washington. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, and actual results could differ materially from the Company's present expectations. Among the important factors that could cause actual results to differ materially from those indicated in the forward-looking statements are: customer demand and trends in the off-price apparel industry, the effect of economic conditions, the impact of competitive openings and pricing, supply constraints or difficulties, and other risks detailed in the Company's Securities and Exchange Commission filings. |
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