Finish Line Inc. reached a deal to sell its struggling urban-inspired Man Alive business for about $7 million in cash to Jimmy Khezrie, owner of the Jimmy Jazz chain.
Under terms of the agreement, which is expected to close next month, Khezrie’s Man Alive Acquisition LLC would pick up 75 stores under the Man Alive and Decibel names, their trademarks and trade names, leasehold interest and lease liabilities and intellectual property.
Finish Line said it registered a $13.2 million loss from Man Alive for the year ended Feb. 28.
“This transaction will allow us to exit our unprofitable Man Alive business and focus our time and resources on our successful core Finish Line business and thereby generate shareholder value,” said Glenn Lyon, chief executive officer.
Khezrie noted: “There are immense economies of scale and synergies that come with this acquisition, which will increase our market share, increase productivity and decrease expenses, and most importantly, provide the consumer with the best and latest in urban fashion.”
As part of the agreement, Finish Line will receive up to $5 million at closing, with the remaining amount to be paid in 12 equal monthly installments. All Man Alive’s workers will stay on with the new company.
The retailer said the chain would be accounted for as a discontinued operation in the second quarter ending Aug. 29.
Finish Line also said it anticipates a first-quarter loss from continuing operations of a penny a share on sales of $267.2 million, which was below analysts’ expectations of a profit of a penny a share on sales of $273.2 million. The company said quarterly same-store sales declined 3.9 percent for Finish Line and 39.1 percent for Man Alive. The retailer will report first-quarter results on Thursday.