BP SELLING ITS LONDON HEADQUARTERS. The British energy giant is negotiating the possible sale of its St. James Square executive offices for £250 million to the Hong Kong-based Investor Lifestyle International Holdings, a department store company, BP confirmed to the Wall Street Journal. Cash from the sale would help retire debt incurred to keep the company functioning during the economic shutdown and subsequent collapse of global oil prices.
If the sale is successful, BP will lease back the building, the company said.
BP bought the building from Ericcson, the Swedish cell phone company, in 2001 when oil was a lucrative business.
Since the shutdown, the building has been mostly empty as employees work from home.
BP has said that oil demand may never return to pre-pandemic levels and, in recent years, has shifted its focus from fossil fuels to renewable energy.
COLUMBIA SPORTSWEAR SHUTS STORES. The 82-year-old company is permanently closing “multiple” stores around the U.S. after third-quarter revenues dropped 23 percent, falling more than $65 million short of the company’s $767-million forecast.
Columbia has already closed eight U.S. stores after shuttering all its European storefronts in March “until further notice.”
“September was our strongest month of the quarter in our U.S. direct-to-consumer business,” CEO Tim Boyle said in a statement announcing the closings, although “we have not seen a sustained improvement in brick-and-mortar store traffic to date. We anticipate traffic in these markets to remain depressed until tourism resumes.”
Columbia will focus on “improving labor efficiency” and renegotiating leases, said Boyle, who has cut his salary to $10,000 through at least the end of this year.
The number and locations of stores to be closed were not announced but, Boyle added, additional closings are possible.
HILTON HOLDINGS INTERNATIONAL REPORTS LOSS. With the economic shutdown still battering the hospitality industry, hotel chain Hilton said it lost $79 million, or 28 cents a share in the third quarter. A year earlier, it reported profits of $288 million, or $1 a share.
Worldwide, the chain’s room occupancy rate was 36 percent below that of the same period in 2019.
Hilton’s share price was down 18 percent for the year but rose 5 percent after the 4 November earnings report because the company outperformed analysts’ forecasts.
SOUTHWEST AIRLINES WARNS OF FIRST-EVER LAYOFFS. Saying that 322 unionized parts workers are refusing to negotiate concessions, the carrier warned it likely will lay off at least 42 of the employees on 11 January.
The layoffs would be the first in the company’s 49-year history.
The airline continues to negotiate with other unions.
Southwest has asked its workers to agree to a 10-percent pay cut for one year after other cost-cutting measures failed to stem a third-quarter cash burn of $16 million a day.
TOWN SPORTS INTERNATIONAL SELLS OUT. The operator of Lucille Roberts gyms and New York Sports Clubs is selling itself out of bankruptcy for about $85 million to Tacit Capital, a private equity firm. The sale is largely in the form of debt forgiveness.
Tacit also will pay $1 million to unsecured creditors and assume various Town Sports liabilities.
Tacit plans to keep 69 of the 185 pre-shutdown locations open if leases can be renegotiated to Tacit’s liking. So far, 40 have been, the company told the Wall Street Journal.
The sale allows Town Sports to preserve more than 1,500 jobs and maintain good relations with vendors and landlords, a company spokesman said in a statement announcing the sale.
PET VALU TO GO OUT OF BUSINESS. The pet supply retailer, with 358 U.S. stores, will close all of its storefronts and warehouses and shut down its headquarters in Wayne, PA.
Sales were crippled by the economic shutdown, the company had said in an earlier statement.
“After a review of all available alternatives, we made the difficult but necessary decision to commence this orderly wind-down,” Jamie Gould, the company’s recently appointed chief restructuring officer, said in a statement announcing the decision.
Pet Valu is owned by Roark Capital Group, a private equity firm.
CEDAR FAIR ENTERTAINMENT REPORTS THIRD-QUARTER LOSS. The Ohio-based theme park owner lost $136.3 million during the period, compared to a $190-million profit a year before.
Because of the shutdown, the company’s parks collectively operated for 314 days during the period, against more than 1,000 operating days during the same period in 2019.
The company owns 12 amusement parks, five water parks, and five hotels across the U.S. and Canada.
STARBUCKS TO CLOSE 200 MORE STORES. After announcing in June that 400 North American locations will shut down, the company has added 200 more sites to its list of closures.
Four hundred U.S. stores and 200 in Canada, almost all in urban core areas, are on the hit list.
Because more people are working at home and “going to school” at home, the company has seen consumer patterns shift from urban to suburban, from sitting in cafés to driving through, from early-morning caffeine jolts to mid-morning pick-me-ups, and more weekend business, CEO Kevin Johnson said in an earnings call last week.
Abandoning stores downtown in favor of the suburbs is part of Starbuck’s plan to “clear the way for the development of new, more efficient retail store formats that cater to the customers’ increasing desire for convenience,” CFO Patrick Grismer said on the call.
PAPER’S SUBSCRIPTION UP, REVENUE DOWN. The New York Times Co. posted a 13-percent increase in subscriptions in the third quarter, with online subscriptions surpassing the hard-copy version for the first time, the company said in a statement announcing the quarter’s results.
The paper’s digital arm added 393,000 subscribers, down sharply from the gain of 669,00 in the second quarter.
Subscriptions accounted for $301 million of the paper’s $426 million revenue for the quarter; ad revenues fell to $79.3 million, with print ad sales plunging 47 percent year over year. Miscellaneous revenue from commercial printing, live events, and other sources dipped 2 percent.
Overall, revenue slipped 0.4 percent compared to 2019’s third quarter.
Quarterly net profits more than doubled to $33.6 million from $16.4 million a year earlier.
ESPN CUTS 10 PERCENT OF STAFF. Disney-owned sports network ESPN will lose 10 percent of its workforce through layoffs and attrition, insiders told the Wall Street Journal on 5 November.
The network will lay off 300 workers and not fill 200 open positions, CEO Jimmy Pitaro told the staff in a memo.
ESPN is coping with sharply reduced revenues as the sports contests it televised were canceled for months during the economic shutdown.
The move also is part of a plan to refocus the network on digital streaming, Pitaro said in his memo, a shift accelerated by the pandemic and economic shutdown.
“The speed at which change is occurring requires great urgency and we must now [serve] sports fans in myriad new ways,” the memo said.
SAINSBURY’S CUTS STORES, JOBS. The British grocery giant is letting go about 3,500 workers as it closes 120 of its 583 Argos department stores around the U.K.
Sainsbury’s bought the Argos chain in 2016 and is closing the stores as part of its plan to shut 420 stand-alone Argos stores by mid-2024, the company said in a statement announcing the closures.
The cuts were announced as Sainsbury’s reported a £137-million loss this year through 18 September after taking a £438-million charge related to the store closures.
The closures are a response to consumers’ migration online, the company said in a statement announcing its financial results.
Online sales rose 117 per cent to £5.8 billion during the period and made up almost 40 percent of total sales.
