The 124 stores consist of properties owned by Toys 'R' Us Inc. and stores with ground or operating leases. Office Depot plans to convert between 50 and 60 of the 124 stores into Office Depots. "The rest will be sold off," Office Depot spokesman Brian Levine tells GlobeSt.com. "We have significant interest from both developers and other retailers, so we are looking to sell off the other properties."
Of the stores to be acquired, seven are located in Florida. Not all of them will be converted into Office Depot stores, Levine says.
The sale to Office Depot is expected to be completed in phases over the next several months. The deal "allows Office Depot to expand our presence in existing core markets and will immediately give us access to large markets where we do not have a strong retail concentration," Levine adds.
Bruce Nelson, chairman and CEO of Office Depot, says, "This highly strategic transaction represents one of many solid steps in our strategy to reposition our North American retail portfolio for growth.
"The combination of right-sized store footprints, attractive market locations and meaningful site counts compelled us to take advantage of this unique strategic opportunity," Nelson said. He added that this single transaction helped Office Depot make significant progress toward its goals.
The deal also would help Toys 'R' Us dispose of significant assets. John Eyler, chairman and CEO of Toys 'R' Us, says: "Overall, the activities related to the closing of our 146 freestanding Kids 'R' Us stores, including the inventory liquidation and the disposition of real estate, are progressing extremely well. As a result, our 2003 and future cash flows will be stronger than previously anticipated, and the charges associated with the closing of these stores will be significantly lower than we had anticipated.
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