Rex Stores will complete a review of options for its stores by la...
Rex Stores will complete a review of options for its stores by late November, CEO Stuart Rose told analysts in a conference call Tuesday. Rex hired Brown Gibbons Lang & Co. in June to weigh plans for its 111…
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
stores, including a possible sale (CED June 26 p4). The firm also is helping Rex find ways to its real-estate holdings into cash while keeping investments in ethanol plants. In a step apparently stemming from the review, Rex sold land near its Cheyenne, Wyo., warehouse. The price wasn’t available at our deadline. Rex has put four closed stores up for sale, Chief Financial Officer Douglas Bruggeman said. It also may not reopen two Louisiana stores damaged by Hurricane Gustav this month. The roof collapsed on a Rex store in Alexandria, La., according to local news reports. Rex also shut an outlet in Trotwood, Ohio. Rex’s investments in ethanol have grown, but its retail business has slumped amid a sluggish U.S. economy. Rex’s Q1 retail net income slipped to $774,000 from $1.9 million on a 3.9 percent same-store sales decline as the chain struggled with a “tough retail environment,” Rose said. Excluding air conditioners, same-store sales fell 7 percent in August and early September, Bruggeman said. Q1 retail sales dropped to $42.5 million from $48 million a year ago. Gross margins in the retail division fell to 29.8 percent from 31.8 percent a year earlier, Bruggeman said. A downturn in sales of DVD players, camcorders, projection and analog TVs was offset by a 46 percent rise in sales of plasma and LCD sets, Bruggeman said. Rex’s total Q1 net income, which includes investments in ethanol plants, declined to $1.52 million, from $7.53 million a year ago when the chain posted a $2.9 million gain on the sale of discontinued operations. Total revenue rose to $67 million from $48 million, as Rex benefited from $24 million in revenue from a 56 percent-owned ethanol plant in Levelland, Texas, that started production in March. The Levelland facility was “slightly profitable” in Q1, but lower ethanol prices have meant it has run at a “slight loss” since, Rose said. Rex’s largest alternative fuels investment is its 74 percent stake in One Earth Energy, Gibson City, Ill., expected to start production in early 2009. - MS