Charming Shoppes to close 207 stores
BENSALEM, Pa., Jan. 28 (UPI) -- Charming Shoppes Inc., the retail apparel chain specializing in women's plus-size apparel, said it plans to close 207 stores and convert another 44 store locations to Lane Bryant as part of a restructuring plan to increase profitability.
The retailer said it plans to close its 77 Added Dimensions/Answer chain stores as well 130 under performing Fashion Bug stores and convert another 44 Fashion Bug store locations to Lane Bryant stores.
Dorrit J. Bern, chairman and CEO, said, "Since our acquisition of Lane Bryant, we have been reviewing our entire business to determine which of our brands would yield the highest returns for the company.
"Closing our Added Dimensions chain of stores results from our decision to re-deploy our resources to our other brands. We are also closing 130 under performing Fashion Bug locations, which will improve the profitability of that division and the company overall," Bern said.
The restructuring plan will result in an approximate $37.5 million non-recurring, pretax charge ($23 million after tax, or 21 cents a share), in the fourth quarter fiscal 2002.
The completion of these initiatives is expected to improve annualized pretax earnings by approximately $12 million, the retailer said.
But, the full impact is expected to first benefit the fiscal year ending Jan. 31, 2004, as the majority of the store closings will occur during the second half of the fiscal year ending Feb. 1, 2003.
The company's credit agreement with its lenders has been amended to accommodate the restructuring plan.
The closing of the Added Dimensions chain, which is a part of Catherines Stores, currently operates 77 plus-size stores in 23 states, concentrated in the Southeast and the Northeast, under the names Added Dimensions and The Answer. Store closings are expected to be completed by the end of the second quarter fiscal 2003.
The retailer said by mid-year 2002, the company would convert approximately 20 percent of the Added Dimensions stores to the Catherine's Plus Size format. Since the remaining stores are in close proximity to existing Catherine's stores, the company has marketing plans to attract Added Dimensions customers to the Catherine's stores.
The closing of the Added Dimensions chain is expected to result in pre-tax earnings improvements of approximately $4 million on an annualized basis.
Closing 130 and converting 44 Fashion Bug stores results in a 14 percent reduction of the 1,252-store Fashion Bug chain.
The majority of the 130 under performing Fashion Bug stores will close during the fourth quarter of the fiscal year ending Feb. 1, 2003.
The locations are dispersed throughout the country, and do not significantly represent any one geographic region. The closing of these 130 stores is expected to result in a pretax earnings improvement of approximately $6 million on an annualized basis.
Charming Shoppes currently operates 2,446 stores in 48 states.
Global Crossing files Chapter 11
NEW YORK, Jan. 28 (UPI) -- High-speed communications services company Global Crossing Ltd. and certain affiliates filed for Chapter 11 bankruptcy protection and the company signed a letter of intent with Hutchinson Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd. for a $750 million cash infusion.
The Bermuda telecommunications company said the bankruptcy filing was made in order to begin a restructuring of the company's balance sheet.
Global Crossing said it and certain of its affiliates began Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York, and coordinated proceedings in the Supreme Court of Bermuda.
Under the reorganization, Hutchison Whampoa and Singapore Technologies agreed to provide $750 million cash for a joint majority stake.
The proposed investment is conditional on the confirmation of a plan of reorganization by the courts before the end of August 2002.
Global Crossing said it had $22.4 billion in liabilities and $12.4 billion in assets.
Under the reorganization, existing common equity and preferred shareholders would not get a stake in the reorganized company. Global Crossing said its creditors would get a combination of cash, new debt, and new equity in the restructured company.
The company said its worldwide operations would be unaffected by the filing and customers will not experience any changes in their service. Employees will continue to be paid their wages and other benefits without interruption.
Hutchison Whampoa and Singapore Technologies Telemedia already have business relationships with Global Crossing and its affiliates.
Asia Global Crossing and Hutchison Whampoa each own 50 percent of Hutchison Global Crossing, a leading telecommunications service provider in Hong Kong providing fixed-line, Internet and data services.
Asia Global Crossing and a subsidiary of Singapore Technologies Telemedia each own 50 percent of StarHub Crossing, which owns and operates a high capacity backhaul network in Singapore.
PanCanadian Energy and Alberta Energy merge
CALGARY, Alberta, Jan. 28 (UPI) -- PanCanadian Energy Corp. said it has reached an agreement to acquire Alberta Energy Co. Ltd. in a share swap to create the world's No. 1 publicly traded oil and gas exploration and production company, with a stock-market value of $13.3 billion.
PanCanadian, already Canada's top explorer and producer, and Alberta Energy, the No. 2 player in that part of the industry, described the deal as a "merger of equals" that will bring together the highest oil and gas output and biggest reserves of all publicly traded independent energy firms.
The combined company to be called EnCana would supplant Houston-based Anadarko Petroleum Corp. as the top exploration and production player.
Under the deal, Alberta Energy stockholders will get 1.472 PanCanadian shares for each of their own shares. PanCanadian holders will own about 54 percent of EnCana and Alberta Energy's investors will own the remainder.
The ratio is based on the average of the closing price for the 10 trading days ended Jan. 23.
The transaction is expected to be neutral to PanCanadian's earnings per share, add to Alberta Energy's.
Proved reserves will total 7.8 trillion cubic feet of natural gas and 1.3 billion barrels of oil and gas liquids, and production in 2002 is targeted at 2.7 billion cubic feet of gas and 255,000 barrels of oil a day.
Daily output by 2005 was forecast at 4 billion cubic feet of gas 430,000 barrels of oil.
EnCana's main production will be in Canada, where it will pump out the most natural gas of any firm, have an extensive set of heavy oil and oil sands assets and control 23 million acres of land. It will also produce oil and gas in the United States, the North Sea and Ecuador.
Major exploration thrusts will be in the Arctic, offshore Nova Scotia, the Gulf of Mexico and the North Sea, where PanCanadian recently made a discovery called Buzzard, billed as the region's largest find in a decade.
It will also run pipelines, gas storage facilities and gas-fired power plants in Canada and the United States.
The companies said they hoped to complete the deal immediately after shareholder meetings in April.
Earnings surge at International Flavors & Fragrances
NEW YORK, Jan. 28 (UPI) -- International Flavors & Fragrances Inc. said its fourth quarter net income surged to $29.2 million, or 30 cents a diluted share, from $1.4 million, or 1 cent a share during the same period a year earlier.
Excluding merger charges, fourth quarter 2000 earnings were $17.1 million, or 18 cents a share.
The world's largest fragrance maker also said it expects earnings increases of 10 percent to 15 percent for the first quarter and 8 percent to 12 percent for the full year, excluding charges for both periods.
The company, which makes artificial aromas and flavors for use in perfumes and cosmetics, said its net sales for the quarter rose to $419 million from $384.5 million.
International Flavors said sales benefited from foreign currency exchange, but were hurt by the sale of some noncore businesses that generated $61 million in sales last year.
However, the company expects its local currency sales will fall at a low single-digit percentage rate in the first quarter from a year earlier and grow in the low single digits for all of 2002.
The 2002 earnings forecast includes the elimination of approximately 35 cents a share of amortization of goodwill in accordance with a new accounting standard.
Richard A. Goldstein, chairman and CEO, said, "International Flavors & Fragrances began 2001 with two main priorities -- continuing to focus on the integration of BBA and further implementing our reorganization. We continue to be very pleased with our progress on both these fronts.
"Additionally, during the year, we improved our customer service and strengthened our relationships with key customers, invested in business development and implemented programs to retain key employees. The actions we've taken to streamline our business and realize operating efficiencies, coupled with our back-to-basics approach, are the cornerstones on which we will build future growth -- achieving superior long-term operating results and enhancing shareholder value," he added.
U.S. ethanol production hits record levels
WASHINGTON, Jan. 28 (UPI) -- Ethanol production in the United States reached record levels last year in concert with increased demand, the Renewable Fuels Association reported Monday.
Production in 2001 climbed to 1.77 billion gallons, up 10 percent from the year before and 20 percent above 1999's mark of 1.47 billion gallons.
"The ethanol industry continues its impressive production expansion," RFA President Bob Dinneen said in a statement.
"Ethanol demand was up throughout the country in 2001, led by California's markedly increased demand for ethanol, increased ethanol blending in areas with tight refining capacity, and heightened consumer demand for domestic fuels following Sept. 11," Dinneeen added.
The bullish times are expected to continue, Dinneen said, noting that construction on 20 new ethanol production plants began last year.
Losses widen at Nextel Partners
KIRKLAND, Wash., Jan. 28 (UPI) -- Wireless communications operator Nextel Partners said its fourth quarter net loss widened to $78.2 million, or 33 cents a share, from $75.3 million, or 32 cents a share during the same period a year earlier.
The company, which provides wireless service under the Nextel brand, service revenues rose to $116.0 million from $51.3 million a year ago.
Nextel Partners said earlier this month that it added 81,700 customers in the fourth quarter, compared with 75,300 in the third quarter and expectations of 78,000.
The company is a regional affiliate of Nextel Communications Inc., the nation's fifth-largest wireless operator.
"2001 was yet another successful year for Partners in which we continued to exceed expectations on all fronts," said John Chapple, Partners' chairman, CEO and president.
"Over the past 12 months we completed the initial build-out of our network on budget and ahead of schedule -- with the deliberate exception of one market which is due to launch early next year," he added.