Finish Line to drop Man Alive business, expects Q1 loss
Finish Line said it's severing ties with the underperforming Man Alive operations. It also reported that it expects a first-quarter loss from continuing operations.
The company said it anticipates a loss from continuing operations of a penny per share on sales of $267.2 million. It expects a quarterly same-store sales decline of 3.9 percent for its namesake stores and a 39.1-percent drop off for Man Alive.
Finish Line is paying $7 million in cash to Man Alive Acquisition LLC, which is controlled by Jimmy Jazz stores owner and operator Jimmy Khezrie, to take certain Man Alive assets and liabilities.
The agreement includes Man Alive's 75 retail stores under the Man Alive and Decibel names as well as their trademarks and trade names. Leasehold interests and lease liabilities are also included in the deal, along with intellectual property.
Finish Line had a $13.2 million loss from Man Alive for the year ended Feb. 28 and said the disposal will allow it to concentrate on its core operations.
As part of the agreement, Finish Line will pay up to $5 million to the Khezrie entity at closing, with the rest of the payments being made in 12 equal monthly installments. The first payment will be made on the first day of the first month after the transaction's completion.
The deal, which was approved by Finish Line's board, is targeted to close early next month. Man Alive's workers will be employed by Man Alive Acquisition LLC after the transaction is complete.
Finish Line will report first-quarter earnings on June 25.
--Compiled by Wendy Geister
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