Jan 30, 2009
Retail Ventures mulls options to address liquidity risk
Jan 30, 2009
Jan 30 (Reuters) - Retail Ventures Inc (RVI.N) is exploring strategic options to address a risk to liquidity at the company and its Filene's Basement unit, and is in talks with lenders about the effect of store closures on one of the unit's credit agreements, sending its shares down 10 percent.
The company said the Filene's unit, an operator of discount stores, will close 11 of its 36 stores in operation by Feb. 28. Retail Ventures plans to renegotiate certain of the remaining 25 operating store leases in addition to leases for the unit's corporate office and warehouse.
"No assurance can be given that the company and Filene's Basement will successfully resolve this situation with the lenders," Retail Ventures, which is also the parent of shoe retailer DSW Inc (DSW.N), said in a regulatory filing.
"The final determination to close these underperforming stores was due to decreased sales and operating profit during the fourth fiscal quarter, as well as the continued negative outlook for the U.S. retail segment generally and Filene's Basement in particular," the company said.
Columbus, Ohio-based Retail Ventures said it will take a non-cash impairment charge in the fourth quarter ending Jan. 31 related to the store closures, but did not provide specific details.
Shares of the company closed down 26 cents at $2.39 Friday on the New York Stock Exchange. (Reporting by Mihir Dalal in Bangalore; Editing by Pratish Narayanan)
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