More signs of resurgent merger and acquisition activity gave traders something to talk about on a slow trading day but were unable to push retail stocks into positive territory.
The S&P Retail Index finished at 463.28, down less than 0.1 percent. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all rose less than 0.1 percent.
The markets were left to digest news that The Gymboree Corp. had agreed to be taken over by Bain Capital Partners LLC, fulfilling expectations of a private equity takeover of the specialty chain geared to children and their parents, as well as Dollar Tree Inc.’s acquisition of the 85-unit Dollar Giant stores chain in Canada.
Gymboree agreed to be acquired and taken private by Bain for $65.40 a share, or $1.8 billion. The price represents a 57.4 percent premium to the company’s shares on Sept. 30, when reports of a possible private equity buy of Gymboree first surfaced, and a 23.5 percent premium to its closing price of $52.95 on Oct. 8. On Monday, shares rose 22.4 percent to $64.83.
The transaction — subject to the tendering of at least 66 percent of the company’s common shares and customary closing conditions — is expected to be completed by the end of the year. Third-party acquisition proposals may be solicited through Nov. 20.
Gymboree operates 1,037 stores under nameplates including Gymboree and Janie and Jack.
Sterne Agee retail analyst Margaret Whitfield pointed out the deal represents a multiple of 7.9 times, meaning enterprise value is 7.9 times the earnings before interest, taxes, depreciation and amortization for the trailing 12 months.
Dollar Tree’s acquisition of Dollar Giant, for $51 million, is the company’s first expansion outside the U.S. The deal is expected to close by mid-November.
Dollar Giant stores average 9,000 gross square feet and operate in British Columbia, Ontario, Alberta and Saskatchewan. The retailer prices its goods and consumables at $1 or less. (All dollar amounts have been converted to U.S. dollars at average exchange.)
Shares of J.C. Penney Co. Inc. rose 1.9 percent to $33.12. William Ackman’s Pershing Square fund disclosed on Friday that it had acquired a 16.5 percent stake in the Plano, Tex.-based midtier retailer and will work in conjunction with Vornado Realty Trust, which bought a 9.9 percent interest.
With the exception of Tokyo’s Nikkei 225, which lost 1 percent, major European and Asian indices moved ahead Monday.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion