WAL-MART FILES SUIT: Wal-Mart filed a suit against Puerto Rico’s Justice Department to prevent it from blocking the retailer’s acquisition of a supermarket chain there. The suit, filed Friday in a federal court in San Juan, accuses the Justice Department of discrimination in pursuing an antitrust action to stop Wal-Mart from buying Amigo supermarkets. As reported Monday, Superior Court Judge Milagros Rivera Guadarrama temporarily blocked the acquisition, responding to a government motion filed Friday claiming Wal-Mart’s purchase of Supermercados Amigo’s 35 supermarkets, which employ 4,500, violated the island’s antitrust laws.
This story first appeared in the December 10, 2002 issue of WWD. Subscribe Today.
NOTED: Sears, Roebuck & Co., through its finance unit, filed with the Securities and Exchange Commission to issue up to $2 billion in medium-term debt in the form of InterNotes. The notes are to be offered to retail investors at varying terms. In the midst of a major restructuring, Sears’ top line has been struggling, most recently with a 10.9 percent comparable-store sales drop in November. The firm also endured a shake-up in its credit unit this fall that ejected top executives and levied an unexpected increase in its domestic provision for uncollectible accounts in the third quarter.
OPERA GOES HOME: Closed-end investment fund Opera, backed by Bulgari, said last Thursday it has acquired 55 percent of B&B Italia, a high-end interior design and upholstery company. Under the terms of the agreement, Opera will develop B&B internationally and expand its retail network. The Busnelli family, who founded B&B in 1966, will maintain the operative management. This is Opera’s sixth investment since it was created in 2000. Opera holds 77 percent of Sector Group and 77 percent of Bruno Magli, among others.
FACTORY 2-CLOSE: Factory-2-U Stores said it will close 23 underperforming units in an effort to boost operating results. The San Diego-based discounter said the move will save $5 million in 2003 and said it intends to reduce current reserves for the closings by $5 million for the fourth quarter ending Feb. 1. It also said it will take an aftertax restructuring charge in its fiscal fourth quarter ending Feb. 1 of $13.2 million, or $1.02 per share. The company said it plans to shutter 12 stores by Feb. 1 and 11 during fiscal 2003, and will liquidate inventory at those stores. It said it will also consolidate its distribution center network and corporate overhead structure. The retailer posted a 9.6 percent decline in November comparable-store sales.
GAP RESTATEMENT: Gap Inc. said Monday in filings with the Securities and Exchange Commission that it understated its merchandise inventory and accounts payable amounts from its fiscal 2002 first quarter ended May 2001, to its fiscal 2003 second quarter, which ended in August. The restatement, Gap said, would not affect its net sales, net earnings, net cash flow, net working capital or financial covenant compliance for previously reported periods. Gap corrected understatements for its inventory and accounts payable balances for the six quarters during the third quarter ended Nov. 2.
GOING TO CHURCH: Prada Group opened a Church’s store in Saint Moritz last week. Designed by Roberto Baciocchi, and covered in teak and wengé wood, the boutique is located in the Palace Arcade, in front of the renowned Hotel Badrutt’s Palace. Patrizio Bertelli, Prada’s chief executive officer, said the opening is in line with the group’s expansion of the brand, acquired at the end of 1999. “[We chose] cities and international locations that we consider strategically important,” Bertelli said. “Saint Moritz represents a key retail area and the position of the store within the Palace’s gallery emphasizes the exclusivity of the label.” There are eight other Church’s stores in the world.