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Gadzooks stores to keep name after acquisition

Gadzooks will keep its name following its sale to Forever 21, but as many as 93 of its stores could be closed, an executive of the acquirer told SCT. “Some of the stores may go back to landlords,” said Larry Meyer, Forever 21’s CFO. “We are evaluating which stores are profitable, but no final decisions have been made.” Gadzooks announced in February that it would sell its 243 stores and other assets to Forever 21 for about $33 million. “We are confident that our fashion abilities combined with the Gadzooks strong retail presence will be a winning combination,” said Meyer. Dallas-based Gadzooks sells young women’s apparel. Forever 21 operates about 200 women’s apparel stores.

Report: Raleigh is No. 1 buyer’s market

In the market to buy a shopping center? Head straight for Raleigh, N.C., says real estate investment advisory firm Sperry Van Ness. In the Irvine, Calif.-based firm’s annual Top 10 Markets to Watch report for 2005, Raleigh ranked as the most profitable market for buyers of retail properties valued at more than $5 million. The city’s 6 percent vacancy rate, a projected income growth rate of 21.68 percent, an average cap rate of 10.4 percent and an average price per square foot of $118 make it a standout, the report says.

Harold’s nets first profit in six years

Upscale apparel retailer Harold’s Stores attributes its first profit in six years to a reduction in its constant price-slashing. “We were having a sale every week, and our sales associates didn’t feel good about selling merchandise to a customer when the price would be reduced so soon,” Harold’s President and CEO Hubert W. Mullins told SCT. “I cut way back on the price incentives. We are also improving the way we buy and present our merchandise.” Mullins says the chain’s full-price items rose from 41 percent of sales in 2003 to 53 percent last year. Harold’s reported full-year net income of $37,000, versus a net loss of $6.2 million the year before. The Dallas-based chain operates 41 stores.

Saks psyched about Federated-May merger

The Federated-May merger is a chance to gain market share for Saks Inc.’s department stores division, CEO R. Brad Martin said on a conference call with investors. Birmingham, Ala.-based Saks’ department store group includes such regional names as McRae’s, Parisian and Proffitt’s. As Federated digests May, Saks will be free to capture significant market share in the next 18 to 24 months, Martin said. “We’ve gained market share against May several years running, where we have competed against them,” he said. “We can accelerate that in 2005 and 2006.” Saks will be opening most of its new department stores in lifestyle centers, Martin says, while Federated will be focused on its mall-based May stores.

DSW to go public with $185 million IPO

Columbus, Ohio-based Retail Ventures says it aims to raise $185 million for its DSW chain through an initial public offering of class-A common stock. Also known as Designer Shoe Warehouse, DSW has 175 stores that average 25,000 square feet. In addition to DSW, Retail Ventures is the parent company of Filene’s Basement and Value City Department Stores. The company says it will use the IPO proceeds to repay debt and to fund expansions and store improvements.

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