ECKERD's SALE OF AMERICAN HOME VIDEO, JBYRONS
ECKERD's SALE OF AMERICAN HOME VIDEO, JBYRONS underscores the chain's renewed emphasis on its health related retail businesses. The chain announced the sale of American Home Video to Tandy Corp. on July 3, and the sale of JByrons to Amcena Corp., a private concern with retail interests, on July 5. Both deals are expected to close in early August, Eckerd said in separate releases. "This sale of JByrons, along with the previously announced American Home Video transaction and the sale of Eckerd's Apparel, is part of the corporation's strategic plan to maximize use of corporate assets and improve shareholders' return on equity in the Jack Eckerd Corp. for future years," Eckerd Chairman and President Stewart Turley stated in the July 5 release. "Following the sale of these three subsidiaries, the company will continue to develop its core operating business, Eckerd Drug Stores,. along with our specialty retail operations." While the 55 Florida-based JByrons stores contributed $7.9 mil. to the corporation's operating profits on sales of $220 mil. during the fiscal year ended July 31, 1984, operating profits declined 29% from the previous year. American Home Video, on the other hand, has consistently lost money since being acquired by Eckerd in 1981. For the fiscal years 1982-1984, the 207 VideoConcepts stores located in 29 states reported operating losses of $15.6 mil., $9.9 mil. and $5.9 mil., respectively. Sales for the video unit in 1984 were $156 mil. The price Amcena will pay for JByrons was not disclosed, however, the release noted that proceeds to Eckerd from the transaction are estimated to be "JByrons' approximate book value." The operating results of the subsidiary will be treated as a discontinued operation in Eckerd's financial statements, according to the release. The company indicated that the deal will not affect the previously announced Ross Stores' venture in central Florida. According to the July 3 release, Eckerd's after-tax proceeds resulting from the sale are estimated at approximately $100 mil. An after-tax write-off of roughly $60 mil. is expected on account of the write-off of non-deductible goodwill of $34 mil. and the adjustment of the values of other assets, the release noted. Eckerd has indicated that the write-off will be treated as a nonrecurring item in the company's books, and the operating results of American Home Video will be reported as a discontinued operation. The firm noted that the proposed transactions are subject to regulatory approval and negotiation of definitive contracts.
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