Goody's Family Clothing reached an agreement in principle with an affiliate of Sun Capital Partners, Inc. to be acquired for a cash price of $8.00 per share. It is anticipated that definitive agreements will be executed within the next 48 hours. The transaction, which will not be subject to financing or due diligence, contemplates the prompt commencement of a cash tender offer followed by a cash merger.
Robert M. Goodfriend, Chairman and Chief Executive Officer of Goody's, and members of his family who beneficially own an aggregate of approximately 42% of the outstanding shares, have also agreed in principle to tender their shares in the transaction. The definitive agreements with the Company and the Goodfriend family will be subject to the continued support of the Goody's Board of Directors in the exercise of its fiduciary duties. The agreements in principle with the Sun Capital Partners, Inc. affiliate is also subject to the final negotiation and execution of definitive agreements which will be subject, among other things, to any necessary regulatory clearances and other customary conditions. Goody's has agreed that it will negotiate exclusively with the Sun Capital Partners, Inc. affiliate.
Goody's also reported total sales of $93.5 million for the fiscal month of September 2005, a decrease of 0.8% from total sales of $94.3 million for the fiscal month of September 2004. Comparable store sales for September 2005 declined 5.5% compared with September 2004.
Total sales for the first eight months of fiscal 2005 decreased 1.2% to $776.6 million from $785.9 million during the same period last year. Comparable store sales for the first eight months of fiscal 2005 declined 6.3% from the same period last year.
“Sales for the month of September 2005 were negatively affected by hurricanes Katrina, Ophelia and Rita, as well as by unseasonably warm weather, which prevailed in our markets,” commented Robert M. Goodfriend, Chairman and Chief Executive Officer. “These factors forced us to be more promotional than planned during the month in an effort to stimulate sales and reduce seasonal inventories. As a result, we expect to report a net loss for the third quarter of 2005 which is significantly greater than the net loss of $0.02 per diluted share reported for the third quarter of 2004.
“Currently, there are six Goody's stores that remain closed as a result of the hurricanes,” Goodfriend added. “One of these stores, located in Lake Charles, Louisiana, sustained limited damage and is currently closed due to a prolonged power outage. The Company expects this store to reopen in October 2005. Stores in Hammond and Houma, Louisiana; and Hattiesburg and Gulfport, Mississippi; are currently expected to reopen in November 2005. A store in West Orange, Texas, is expected to reopen in March 2006.”
The Company also announced the grand openings for two relocated stores being held today — one each in Norton, Virginia, and Oxford, Mississippi. In addition, on October 20, 2005, the Company plans to open two new stores — one each in Monroe, North Carolina, and Ponca City, Oklahoma.
Additionally, the Company announced a revision to its previously released guidance for new store openings for fiscal 2006. The Company now expects to open nine new stores in 2006 versus previous guidance of ten.
