RVI Mulls Sale of Value City

by MR Magazine Staff

NEW YORK – Retail Ventures Inc. said late Wednesday that it would consider selling its Value City Department Stores division and had retained Financo Inc. and CIBC World Markets Corp. to advise it on the matter.

RVI said that it was not considering a sale of its other units, DSW Inc. and Filene’s Basement, and cautioned that it couldn’t assure investors that its exploration of “strategic alternatives” would result in a specific transaction.

The Columbus, Ohio-based off-price retail group added that it would not be disclosing information on the progress of the initiative “unless and until the board of directors has approved a definitive transaction.”

The announcement came just two days after RVI reported a net loss of $34.1 million during the third quarter ended Oct. 28. Without a non-cash charge reflecting a decline in the value of warrants, the loss would have been a more modest $3.5 million.

During the period, sales rose 5.6% to $787.6 million, but were down fractionally at Value City to $341.2 million. Filene’s Basement sales were up 11.8% to $114.2 million and those at DSW advanced 9.9% to $332.2 million. On a same-store basis, Filene’s was strongest (up 4.5%), followed by DSW (up 2.6%) and Value City (up 1.4%).

For the nine months, DSW moved ahead of Value City in division volume, garnering $950 million in sales, or 43.3% of the total, to Value City’s $946 million, or 43.1%. Comparable-store sales were up 4.8% at Filene’s, 3% at DSW and 0.6% at Value City.

At the end of the quarter, RVI operated 113 Value City stores, 30 Filene’s Basements and 215 DSW units. While DSW is nationwide in scope, Filene’s Basement is strongest in the Northeastern and Midwestern U.S. and Value City spans the Midwest, Southeast and mid-Atlantic regions.