It not only can increase the bond rating of company, but also benefit the company in the long run. Certain leases provide for contingent rents which are based upon store sales exceeding stipulated amounts and are immaterial in fiscal, andscheduled rent increases, and renewal options generally ranging from five to twenty years.
In addition to reducing stockouts and excess inventory, this strategy empowered local managers to carry the merchandise that met local needs. By carrying a broad variety of household items, from bedding to bath items to kitchenware, BBBY offered one-stop shopping convenience for customers.
The tradeoff theory of capital structure states that a value-maximizing? While large department stores typically devoted about 20, square feet to home furnishings, BBBY stores averaged over 33, square feet and sometimes exceeded 80, square feet.
We have been begging the company to initiate a share repurchase program, but they are very old- fashioned and set in their ways: cash is king and debt is bad. Given the low interest rates in earlythe climate seemed favorable for BBBY to consider adding debt to its capital structure.
BBBY was expected to add 80 to 90 new stores in fiscal yeareventually building to 1, stores within the United States. Earnings per share Appendix two will improve due to the share buyback and the net income reducing effect of the new interest expense.
In addition to the broad merchandise selection at competitive prices, customers could expect top-notch service. In look and feel, BBBY stores differed from competing stores.