Big 5 Weighing Buyback After Disappointing Response to IPO
RETAIL
by Deborah Belgum
Executives at Big 5 Sporting Goods Corp., whose initial public offering was launched on June 25 to lackluster response, said the company may buy back some of the stock if it doesn’t perform better.
“It is something we would consider going forward with if the stock stays at these levels,” Big 5 President and Chief Executive Steve Miller said in a second quarter conference call with analysts.
Executives at the El Segundo-based sporting goods chain had hoped that the company’s IPO would fetch $14 to $15 a share when issued. But it closed at $13.01 the first day of trading, raising $105 million from the sale of 8.05 million shares.
Since then the stock price has dropped and is trading in the $10.50 to $10.75 range.
The company has shown consistently strong quarterly earnings for the past five years, but it has a long-term debt load of $151 million.
Miller also said that company executives are scouting for locations to build a new warehouse to replace its 440,000-square-foot facility in Fontana to handle future growth. Meanwhile, a satellite distribution center will be set up to add warehousing space.
Currently the company has 261 stores primarily in California, Washington, Arizona, and seven other western states. It plans to add 15 stores to the chain this year and another 15 to 20 stores next year.
Hollywood Move
Wolfgang Puck Catering and Events, a division of the Wolfgang Puck empire, is negotiating to take over an 18,000-square-foot area on the top of the Hollywood & Highland retail and entertainment complex that was slated for the Hollywood costumes museum being planned by Debbie Reynolds.
“We don’t have a signed deal, but I think it is a matter of time,” said Carl Schuster, president and managing partner of Wolfgang Puck Catering and Events.
The division, which has an exclusive agreement to cater all events in the Grand Ballroom at Hollywood & Highland, needs more space for catering entertainment events and post-party events following presentations at the Kodak Theatre.
“We would also continue to cater more movie premieres held at Mann’s Chinese Theatre,” Schuster said.
The catering company is planning to move its offices from across the street at the El Capitan Building to the “nose” of Hollywood & Highland, an area that juts out from the complex and overlooks the Renaissance Hollywood Hotel.
On July 23, Hollywood & Highland developer TrizecHahn Hollywood LLC sued the organizers of the Debbie Reynolds museum seeking to shake the stalled enterprise from its lease of the 18,000-square-foot space.
Making Room
Los Angeles County leads the state in the number of new hotel rooms planned to be built, according to Atlas Hospitality Group in its mid-2002 Hotel Development Survey.
A total of 12,100 new hotel rooms are currently planned for the area, a 2.3 percent increase over 2001.
The largest hotel under construction in the county is the 190-room Courtyard by Marriott in Burbank. Eight other new hotels are under construction in the county, which will add another 863 rooms.
Five new hotels have opened in Los Angeles County so far this year, including the 207-room Standard Hotel in downtown L.A., the 101-room Hotel Graciela in Burbank and the 142-room Hilton Garden Inn in Calabasas.
Staff reporter Deborah Belgum can be reached at (323) 549-5225 ext. 228, or at
[email protected]
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