The home improvement chain also said the malware responsible for the breach has been removed from all stores.
Contending that the costs of operating as a public company outweigh the benefits, the multichannel retailer of outdoor sports gear and apparel is planning to go private next year.
Contending that the costs of operating as a publicly held company outweigh the benefits, multichannel outdoor sports gear and apparel retailer Gander Mountain Co. is planning to go private early next year, the company says.
Gander Mountain, which is listed on the NASDAQ exchange under the symbol GMTN, plans to pay $5.15 in cash per share to shareholders owning fewer than 30,000 shares as part of a plan to reduce its number of beneficial shareholders to fewer than 300. The company’s two largest shareholders, Gratco LLC and Holiday Stationstores Inc., have agreed to fund the cash payment of shares. The reduction to fewer than 300 shareholders is required under rules of the U.S. Securities and Exchange Commission for deregistering shares of common stock.
At mid-day today, the company’s stock was trading at about $5.08 per share, virtually unchanged from yesterday’s close of $5.09 but down from the 52-week high of $6.49.
A Gander Mountain spokesman notes that the change to private company status is not expected to lead to any changes in operations, including the number of employees and vendors the company maintains. “It will be business as usual,” he says.
The spokesman adds that Gratco and Holiday Stationstores already own about 75% of the company. “The reality is that we have been like a privately held company that has been operating under rules pertaining to publicly held companies,” he says.
The move to private company status, which would eliminate the cost of filing financial reports with the SEC, comes at a time when Gander Mountain has been reporting declines in sales. Although it doesn’t break out Internet sales, it reported a 5.4% decrease in combined web and catalog sales for the second quarter ended Aug. 1, 2009, to $37.6 million from $39.7 million a year ago, as comp-store sales fell 2.4% and total sales dropped 1.8% to $248.4 million from $252.9 million.
The company reported a Q2 net loss of $7.3 million, compared to year-ago net loss of $4.9 million.
For the 26 weeks ended Aug. 1, direct sales fell 10.2% year over year to $53.3 million from $59.4 million, as total sales increased 3.4% to $476.1 million from $460.5 million, and net loss widened to $29.3 million from $25.9 million.
On a more positive note, the company has been improving gross profit margins and inventory control in its core merchandise categories of hunting, fishing and boating products, says Reed Anderson, a stock analyst who follows Gander Mountain at investment research firm D.A. Davidson & Co.
St. Paul, MN-based Gander Mountain, No. 225 in the Internet Retailer Top 500 Guide, operates GanderMtn.com and 116 Gander Mountain retail stores and three outlet stores in 23 states. It is also the parent company of Overton’s, which retails boating and water sports supplies through Overtons.com and a related catalog.