Outdoor financials: VF Corp. secures $400 million in financing, closes sale on Lucy Activewear, plus Dick's Sporting Goods, Gander Mountain, Luxottica/Oakley

VF Corp. secured $400 million in financing, closes sale on Lucy Activewear. Dick's Sporting Goods' Q2 profit rose on higher sales. Gander Mountain's Q2 loss widened. FTC ended the Luxottica-Oakley waiting period, and the merger of the companies is under OFT review.
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VF Corp. secures $400 million in financing, closes sale on Lucy Activewear

VF Corp. (NYSE: VFC) has taken out a $400 million line of credit that could be used, among other things, to fuel further acquisitions. VF is the parent of various outdoor brands including The North Face, JanSport, Eastpak and Eagle Creek.

VF said in a filing with the SEC that it had signed a credit agreement with Citigroup Global Markets and Banc of America Securities to borrow up to $400 million.

The signed agreement extends through Aug. 19, 2008, and VF could ask to extend the agreement for another 364 days beyond that, according to the filing.

The credit line, if tapped, would be used for "general corporate purposes including without limitation the making of acquisitions."

In July, VF announced it would spend $885 million to acquire retailer Lucy Activewear and Seven For All Mankind jeans. Company executives at that time said they would continue to be on the lookout for more acquisitions.

VF closed the sale of the women's active lifestyle brand Lucy Activewear on Aug. 27, which has approximately $57 million in annual revenues and 680 employees.

Dick's Sporting Goods' Q2 profit rises on higher sales

Dick's Sporting Goods (NYSE: DKS) said its fiscal 2007 second-quarter profit rose 87 percent on higher sales from both existing and new stores with the inclusion of Golf Galaxy.

For the three months ended Aug. 4, the company earned $47.9 million, or $0.83 per share, compared with a profit of $25.7 million, or $0.47 per share, during the same period a year prior.

The number of shares outstanding rose some 5.2 percent from approximately 54.9 million to about 57.8 million.

Revenue climbed 38 percent to $1.01 billion from $734 million. Same-store sales rose 7.2 percent during the quarter.

During the quarter, the company opened six Dick's Sporting Goods stores and two Golf Galaxy stores. The quarter ended Aug. 4 and the company's fiscal year ends Feb. 3.

Additionally, the company said it is raising its full-year outlook and setting third-quarter guidance.

The company now expects full-year profit to range from $2.47 to $2.50 per share, up from prior guidance between $2.37 and $2.40 per share. In fiscal 2006, the company earned $2.03 per share.

The company said it plans to open 45 new Dick's Sporting Goods stores during the year and that same-store sales are expected to rise 2 percent. The company's fiscal year ends Feb. 3.

During the third quarter, the company said it expects profit between $0.09 and $0.12 per share, compared with a profit of 14 cents a year prior. The company cited a shift in the retail calendar and the buyout of Golf Galaxy as factors in the expected decline. The company said it expects a same-store sales decrease between 1 percent and 3 percent during the third quarter.



Gander Mountain Q2 loss widens


Gander Mountain (Nasdaq: GMTN) said its fiscal second-quarter loss widened as costs at the company rose because of the rollout of a new product line and a new incentive plan.

The loss for the quarter ended Aug. 4 totaled $9.7 million, or $0.48 per share, compared with a loss of $7.6 million, or $0.53 per share in the prior-year period.

Revenue rose 19 percent to $216.5 million, from $182.5 million last year. Same-store sales grew 4.2 percent during the quarter.

Store operating expenses rose 20 percent to $43.7 million, as the company expanded its PowerSport areas in stores, including adding a Tracker Marine Group boat product line.

General and administrative expenses increased 22 percent to $11.7 million as the company implemented a new incentive compensation program.

The company opened three stores during the second quarter, bringing the number of stores operated at the close of the second quarter to 108. For all of fiscal 2007, the company plans to open a total of 13 stores, including three replacement stores, bringing total stores operated at year end to 115.

In other company news: David Pratt, chairman of the board of Gander Mountain reaffirmed his long-term investment position and involvement in the company's operations.

Commenting on a SEC registration statement on Form S-3 filed by the company, Pratt said that he has no plans to change his investment position with the retailer or sell any company stock he owns.

An entity managed by Pratt invested approximately $50 million in the rapidly growing company and he was elected chairman of the board in December 2006.

The S-3 filing was made by Gander Mountain to register stock held by two former officers and one current officer of the company, as well as by the Pratt entity. The Pratt entity's shares were registered pursuant to the customary registration rights that were granted to the Pratt entity as part of the December 2006 transaction.

FTC ends Luxottica-Oakley waiting period, merger under OFT review

Luxottica Group (NYSE: LUX) said the Federal Trade Commission granted early termination of the waiting period for its proposed acquisition of fellow eyewear maker Oakley (NYSE: OO) without a second request for additional information.

The deal is still subject to certain antitrust and competition law clearances outside of the United States, as well as approval by Oakley shareholders, Luxottica said. It is being reviewed by the UK OFT, as opposed to the European Commission as originally anticipated, with an established comment period deadline of Sept. 6, 2007.

According to sources, the OFT has not been involved in many major transactions over the last few years. It is somewhat surprising that the EU did not assert jurisdiction over this deal initially, given the international presence of both companies and their products, and the overall breadth of the combination. So the initial impression is the OFT is likely to defer this case to the EU for a full review, rather than approving it outright. In fact, analysts say it would not be at all surprising if the EU determined that a formal review is necessary regardless of the OFT review.

There is still no indication of when the initial proxy statement will be submitted to the SEC. It is assumed that the various non-U.S. regulatory matters are the primary focus of the companies at this stage, and that the first proxy will be filed when the necessary merger notifications are filed. Given the timing of the OFT submission, the first proxy is expected without much further delay.

Luxottica announced plans in June to acquire Oakley for $2.1 billion, or $29.30 a share, in cash.

Luxottica Group and Oakley stated that they expect the transaction to close in the fourth quarter of 2007.



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