Buyers of Wickes Likely to Sell Off Retail, Credit Units
The New York buyers of Wickes Cos. said Tuesday that they expect to sell some or all of the Santa Monica company’s retail operations, possibly including the Builders Emporium and Wickes Furniture chains.
The disclosure is the latest in a rapid-fire round of changes surfacing in the week since the investment banking firms of Blackstone Group and Wasserstein Perella & Co. agreed to buy Wickes for $538.9 million in cash and stock.
After the deal was announced last Wednesday, it was quickly revealed that Wickes Chairman Sanford C. Sigoloff would leave the company he rescued from bankruptcy. And Thursday, he said there would be some layoffs at the corporate headquarters after the first of the year.
The new buyers have remained mum about exactly what they plan to do with the far-flung Wickes that sells everything from automobile upholstery to home furnishings. But in a filing with the Securities and Exchange Commission on Tuesday, WCI Holdings--the firm formed to buy Wickes--indicated that it may break up the company.
“The purchaser expects to sell a significant amount of the company’s assets,” the statement says. “Based on information currently available to it, the purchaser expects to sell most or all of the company’s retail and credit operations. However, the purchaser and (WCI Holdings) will continue to review the company’s portfolio of businesses with regard to the benefits that could be realized from asset sales.”
The company did not specify which retail units it would sell and went on to note that it could change its mind about such a sale, depending on what kinds of offers it gets.
The statement was filed with the SEC as part of WCI Holdings tender offer for Wickes stock that began Tuesday. WCI is offering shareholders a package of cash and WCI preferred stock it values at $11.25 a share. The Wickes board of directors unanimously approved the deal last week.
Representatives of WCI and the Blackstone and Wasserstein firms were not available for comment on the SEC filing. Officials at Wickes also would not comment on it.
Anthony Pearce-Batten, an analyst at the Baltimore brokerage of Legg Mason Wood Walker, said Wickes’ retailing operations include Builders Emporium, Orchard Hardware Supply, Wickes Furniture and APS, which sells auto parts. WCI Financial handles the receivables for Wickes Furniture.
Effective Message
Pearce-Batten estimated that the retail and credit units accounted for about $1.6 billion of Wickes’ 1987 sales of $3.48 billion. “You either keep the manufacturing businesses and sell retail or do the other way around,” Pearce-Batten said.
The retailing units were the last of the original businesses that Sigoloff inherited when he assumed the helm at troubled Wickes. He successfully shepherded it through one of the biggest bankruptcy reorganizations in corporate history, transforming Wickes from a retailer into a diversified consumer and industrial products company.
Sigoloff’s popular “We got the message!” commercials for Builders Emporium were credited with helping to restore confidence among consumers and suppliers during the touchy reorganization period.
Late last week, James R. Birle, a partner of Blackstone, was visiting executives of Builders Emporium, Orchard Supply and WCI Credit within 24 hours after Wickes directors unanimously approved his buyout offer. He will share chairmanship duties with Robert B. McKeon, a managing director of Wasserstein Perella.
