Canadian Tire in sale-leaseback deal
Home improvement and automotive retailer Canadian Tire has announced a deal to sell and lease back 12 of its store locations for $174 million. The company expects to receive a pre-tax gain of $70 million on the deal.
The transaction is expected to close in September 2008. The company did not disclose a buyer.
Each of the properties included in the deal include a recently constructed or expanded Canadian Tire store, and six of the sites also feature a Mark’s Work Wearhouse, the company’s work clothing retail banner. Together, the properties total approximately 996,000 square feet of gross leaseable area, the company said in a statement.
Currently, Canadian Tire owns approximately 74 percent of its Canadian Tire retail store network and leases the balance of its other retail properties.
“While we continue to see real value in owning the majority of our real estate assets, carefully selected sale/leasebacks enable us to monetize the value of select properties creating financial flexibility while maintaining our overall operating flexibility,” said Tom Gauld, president and CEO of Canadian Tire.
In its second quarter, Canadian Tire recorded adjusted net earnings of $94.7 million, down 13.8 percent compared with last year. Sales increased 1.5 percent.
“Retail sales across all product categories were generally impacted by the economy, however seasonal businesses in the leisure category were particularly soft due to the cold wet weather in May and June,” the company said in a statement.
Based in Toronto, Canadian Tire operates more than 1,170 general merchandise and apparel retail stores and gas stations throughout Canada.
American Woodmark reports tough first quarter
Kitchen cabinet and bath vanity maker American Woodmark saw earnings fall to $156,000 in the first quarter of 2009, down from earnings of $5.1 million in the same period last year.
Sales fell 16 percent to $139.2 million from $166.1 million in the same period last year.
The decline in sales was attributed to lower volume in both the company’s remodeling and new construction customers.
The Winchester, Va.-based manufacturer also saw a decline in its profit margin, in part because of significantly higher freight and material costs. The company was able to reduce operating expenses by reducing head count in the first quarter.
American Woodmark distributes its products through home centers, major builders and a network of independent distributors.
Sears’ home services head to depart
Sears Holding has announced that the head of its home services division, Mark Good, will leave the company. The reason for Good’s departure was not disclosed.
Sears home services include installation services, such as windows, doors and siding, as well as HVAC work and carpet cleaning.
Good has been with Hoffman Estates, Ill.-based Sears since 1997, and he has overseen the home services division since 1999.
According to the Chicago Tribune, Sears said it will announce a replacement for Good in “the very near future.”