WOOLWORTH CORPORATION ANNOUNCES AGREEMENT TO SELL APPROXIMATELY 120 WOOLCO STORES IN CANADA TO WAL-MART STORES, INC.
NEW YORK, Jan. 14 /PRNewswire/ -- Woolworth Corporation (NYSE: Z) announced today the signing of a definitive agreement under which its wholly owned Canadian subsidiary, Woolworth Canada Inc., would sell approximately 120 of its 142 Woolco discount department stores to Wal-Mart Stores, Inc. (NYSE: WMT). Terms of the cash transaction were not announced. The transaction involves the sublease of the Woolco stores affected, the sale of the assets of those stores and virtually all of the inventory and inventory commitments of the Woolco operation, other than inventory in the stores not being acquired. Wal-Mart has announced that R. Bruce West, who is currently the president and chief operating officer of Woolworth Canada Inc.'s Woolco division, will become president and chief executive officer of Wal-Mart's Canadian operations, effective at the closing on the transaction. Substantially all employees working in the affected Woolco stores will be offered employment by Wal-Mart. Wal-Mart has stated that it will hire other, non-store employees of Woolworth Canada Inc. as it builds its operations in Canada. William K. Lavin, chairman of the board and chief executive officer of Woolworth Corporation, said, "The sale of these Woolco stores will allow us to focus our resources on the specialty businesses that provide the highest returns to our shareholders." Woolworth will continue to operate the more than 1,400 stores in Canada, which are not affected by the transaction. During 1994, approximately 150 stores are planned to be opened in Canada, including the conversion of about 100 Woolworth stores to The Bargain! Shop format. Woolworth Canada Inc. plans to convert to other retail formats, dispose of or close the Woolco stores not included in this transaction. The transaction is subject to Canadian regulatory review and approval. It is anticipated that the transaction will be completed on or about March 1, 1994. While actual proceeds from the transaction cannot be determined until the closing, the transaction is expected to generate cash of approximately of $300 million, which will be used for general corporate purposes. Also, due primarily to the recognition of foreign currency translation losses that had previously been charged to the foreign currency account in shareholders' equity, the transaction will result in a non-cash charge to net income of approximately $45 million, or 34 cents per share. Woolworth Corporation operates stores in over 40 different retail formats in 13 countries in North America, Europe, Australia and Asia. In Canada, the company operates more than 1,400 stores -- under such names as Northern Reflections, Lady Foot Locker, Foot Locker, Northern Getaway, Silk & Satin, Randy River and The Bargain! Shop. -0- 1/14/94 /CONTACT: Frances E. Trachter of Woolworth, 416-480-7369/ (Z WMT) CO: Woolworth Corporation; Wal-Mart Stores, Inc. ST: New York, Arkansas IN: REA SU:
SH -- NY008 -- 2044 01/14/94 08:45 EST
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|Date:||Jan 14, 1994|
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