Venture's profits jump in '90 - Venture Stores Retailers Ltd

Discount Store News, March 18, 1991

Venture's Profits Jump in '90

Sales Up After May Dept. Stores Co. Spin-Off

O'FALLON, Mo. -- In its first annual sales and earnings statement as an independent chain, Venture reported that pretax profits in 1990 rose to $53.8 million on sales of $1.42 billion.

In 1989, pretax profits were $17.9 million on sales of $1.36 billion during the last full year of May Department Stores Co. ownership. But after adjustment of $35.4 million for May's spin-off expenses, pretax profits were $53.3 million in 1989.

Net profits rose to $34.5 million in 1990, compared with $12 million in 1989, or $36.5 million after adjustment for spin-off expenses.

Effective last November, May spun off Venture to its stockholders. But as the price of independence, Venture had to pay its parent $262 million. It raised the money by selling and leasing back 29 stores and its two distribution centers, substantially raising rent expenses. In addition, Venture borrowed $75 million by mortgaging 14 other stores.

The restructuring meant that Venture started out its new life as a significantly more levered chain, with a total of $307.1 million in short and long-term debt on its balance sheets at year-end, compared with $199.3 million in 1989, prior to the spin off.

Total stockholder equity slumped to $91 million, as of Feb. 2, 1991, from $309.7 million the year before May pulled out its capital. Venture currently operates 80 stores.