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WOOLWORTH CORPORATION SETS REDEPLOYMENT PLAN FOR U.S. STORES

 WOOLWORTH CORPORATION SETS REDEPLOYMENT PLAN FOR U.S. STORES
 NEW YORK, Jan. 8 /PRNewswire/ -- Woolworth Corporation (NYSE: Z), announced today plans to step up the redeployment of underperforming stores in the United States in order to improve productivity, stimulate earnings growth and enhance shareholder value.
 The accelerated redeployment program calls for the reformatting, closing or sale of approximately 900 U.S. specialty and general merchandise stores -- of more than 9,300 stores worldwide -- that have not met the company's financial objectives. The company expects that approximately one half of the stores to be redeployed will be converted to other of its successful, ongoing specialty formats. The accelerated redeployment program is expected to result in an after-tax charge of approximately $250 million, or $1.92 per share, against the company's fourth quarter earnings. The company stated that it expects the effect of this program on the company's cash flows, on an after-tax basis, will, in total, be less than $50 million over the next five years.
 Harold E. Sells, chairman and chief executive officer, said, "Implementation of the redeployment program, approved today by the board of directors, will enable us to focus our resources on our strongest store formats and locations. As a result, we expect that our ongoing operations will be able to meet or exceed our financial objectives," he stated.
 The company also announced that it plans to adopt Financial Accounting Standards Board Statement No. 106 -- FAS 106 -- effective retroactively to Jan. 27, 1991, the first day of the company's current fiscal year. FAS 106 requires accrual for post-retirement benefits, other than pensions, over an employee's career, rather than charging these costs on a cash basis, as incurred. The company has elected to record a one-time, after-tax, non-cash charge of approximately $115 million, or $.88 per share, to recognize the accumulated obligation for retirees and active employees as of Jan. 27, 1991. This accounting change is expected to have the additional effect of decreasing after-tax profit for the year ending Jan. 25, 1992, by approximately $4 million.
 For the 39 weeks ended Oct. 26, 1991, the stores targeted as part of the accelerated redeployment program accounted for approximately $342 million of the total revenues of $3,954 million for all U.S. stores. The targeted stores incurred an operating loss of approximately $50 million, which is reflected in the $168 million total operating profit for all U.S. stores during this same period. "Unfavorable economic conditions, that contributed to these results, have greatly accelerated the urgency and magnitude of our store closing and redeployment program," Sells said.
 Key elements of the accelerated redeployment plan include:
 -- Discontinuing the following specialty store formats: Susie's/Sportelle women's apparel boutiques, with 207 stores; and the Richman Brothers/Anderson-Little men's and women's apparel shops, with 268 stores and three manufacturing plants. The company plans to convert substantially all of the Susie's/Sportelle locations into existing successful formats. It will also pursue the possibility of selling Richman Brothers/Anderson-Little as an operating company.
 -- Trimming five other U.S. retail formats by the reformatting, sale or closing of approximately 15 percent of the Kids Mart/Little Folk Shops infants' and children's apparel stores; approximately 25 percent of the Kinney family shoe stores; and approximately 8 percent of the Woolworth/Woolworth Express general merchandise stores.
 Woolworth Corporation operates a total of approximately 6,500 stores in the U.S., including nearly 5,500 specialty stores and more than 1,000 general merchandise stores.
 -- It is estimated that over the next 12-to-18 months, approximately 4,700 full-time and 5,300 part-time associates will be affected by the accelerated redeployment program. Associates in specialty formats that are not sold may be offered other jobs within the company, or may be eligible to receive a separation package. Currently, the company employs approximately 38,000 full-time and 32,000 part-time associates in the U.S., and a total of approximately 73,000 full-time and 69,000 part-time associates worldwide.
 The redeployment program represents an acceleration of a key strategic priority of the company: the restructuring, reformatting and revitalizing of businesses which can meet the company's financial objectives within a reasonable time span -- and the redeploying of assets away from those businesses which cannot.
 Redeploying space freed up by discontinued stores to other formats has been a consistent feature of the company's aggressive real-estate management policy in recent years. Approximately 10 percent of the company's stores in the U.S. operate in space formerly occupied by a different company format.
 In another action, reflecting its confidence in the company's future growth and sound financial condition, the board of directors of Woolworth Corporation today declared a quarterly cash dividend on the company's common stock of $.27 per share, payable March 1, 1992, to shareholders of record on Feb. 3, 1992. The board also declared a quarterly cash dividend on the company's $2.20 Series A Convertible Preferred Stock of $.55 per share, also payable March 1, 1992, to shareholders of record on Feb. 3, 1992. These dividend rates are the same as for the prior quarter.
 The company also announced today that it plans cash capital expenditures of approximately $400 million during the year beginning January 26, 1992, in largest part for the purpose of opening some 850 stores worldwide. This amount includes expenditures for stores to be opened in space freed up by the closing of underperforming stores under the accelerated redeployment program, but it does not include expenditures for any possible acquisitions. During the year ending Jan. 25, 1992, the company will have made approximately $380 million in cash capital expenditures, exclusive of acquisitions, to open some 800 stores worldwide. Internally generated funds are expected to be sufficient to fund the company's cash capital expenditures for the year beginning Jan. 26, 1992.
 Of Woolworth Corporation's more than 9,300 stores worldwide, some 7,600 are specialty stores and more than 1,700 are general merchandise stores. The company has retailing operations in eleven countries: the U.S., Canada, Mexico, Germany, England, Belgium, France, Italy, Luxembourg, the Netherlands and Australia.
 -0- 1/8/92
 /NOTE TO EDITORS: Two other Woolworth Corporation news releases are also being issued today: "Dividends Declared by Woolworth Corporation" and "Woolworth Corporation Announces Corporate and Subsidiary Management Changes."
 /CONTACT: Frances E. Trachter of Woolworth, 212-553-2394/
 (Z) CO: Woolworth Corporation ST: New York IN: REA SU:


TS -- NY089 -- 7775 01/08/92 12:11 EST
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Publication:PR Newswire
Date:Jan 8, 1992
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