Harris Teeter & Lowe's Food Stores Agree To Purchase & Sell Certain Assets
Charlotte, N.C. - Harris Teeter Supermarkets, Inc. and Lowe's Food Stores, Inc. announced a purchase and sale agreement between the Company's operating subsidiary, Harris Teeter, Inc., and Lowes Foods. The agreement will result in Harris Teeter acquiring ten Lowes Foods store locations in the central Carolinas region and Lowes Foods acquiring six Harris Teeter store locations in western North Carolina.
The Lowes Foods stores that Harris Teeter will acquire include one store in Mint Hill, N.C.; one store in Fort Mill, S.C.; one store in Weddington, N.C.; three stores in Charlotte, N.C.; one store in Davidson, N.C.; one store in Cornelius, N.C.; one store in Huntersville, N.C.; and one store in Wesley Chapel, N.C.
The Harris Teeter stores that Lowes Foods will acquire include one in Asheville, N.C.; two in Gastonia, N.C.; one in Hickory, N.C.; one in Morganton, N.C.; and one in Shelby, N.C.
In addition to the six Harris Teeter stores, Harris Teeter has agreed to pay Lowes Foods $26.5M. The transaction is expected to be completed in the Company's third quarter of fiscal 2012, which ends July 1, 2012.
Harris Teeter plans to temporarily close the acquired stores for five to sixteen weeks for remodeling, stocking and training of employees. Three of the acquired stores are expected to be converted to a new innovative format featuring a worldwide variety of wine, beer, specialty foods and other selected merchandise. One of the acquired stores is expected to be subleased. In connection with this transaction, the Company expects to record pre-tax non-cash impairment losses and other related expenses totaling between $23 and $26M during the second half of fiscal 2012. The after-tax impact is expected to range between $14M, or $0.29 per diluted share and $16M, or $0.32 per diluted share. The majority of these charges are expected to be recorded in the Company's third fiscal quarter which ends on July 1, 2012.
Lowes Foods plans to reopen under the Lowes Foods banner the six stores acquired from Harris Teeter after a brief closing for remodeling, stocking and training of employees.
Thomas W. Dickson, Chairman of the Board, and Chief Executive Officer commented that, "This transaction aligns with our strategic plans to replace rural store locations with more urban locations with higher density of our target demographic groups. It provides us with the opportunity to explore in selected locations an innovative format that we think our customers will find exciting."
SOURCE: Harris Teeter Supermarkets, Inc.