From Home Furnishing Business
Big Lots Finalizes Sale of Rancho Cucamonga Distribution Center
Discount retailer Big Lots, Inc. (NYSE: BIG) has announced the completion of the sale of its distribution center in Rancho Cucamonga, Calif. Operating since 1984, the facility is being sold as a result of the company's move to a new distribution center in Apple Valley, Calif.
Located in the Mojave Desert, the Apple Valley distribution center is a 1.4 million square foot facility that will improve speed to market, capacity, and service to stores with advanced automation including an automatic storage retrieval system, robotic depalletizers, carton shuttles, and carton sortation equipment.
The company will utilize the Rancho Cucamonga distribution center on a leaseback arrangement until the Apple Valley distribution center is fully operational in spring 2020.
Cash consideration for the sale was $191 million. The company has reinvested $69 million of the proceeds to exercise a purchase option on its corporate headquarters in Columbus, Ohio, effected through a qualified intermediary to accommodate a tax-deferred exchange. Net after-tax proceeds of approximately $90 million will be used to pay down a portion of the outstanding balance on the company's unsecured line of credit. The company will recognize a one-time, pre-tax gain of approximately $179 million in the third quarter of fiscal 2019.
Commenting on the announcement, Ronald A. Robins, Jr. (Rocky), EVP, general counsel & corporate secretary of Big Lots stated, "We are pleased to complete the sale of our legacy California distribution center as part of the transition to our new, state-of-the-art distribution center. The net proceeds; in addition to allowing us to effect a like-kind exchange for our corporate headquarters, will strengthen our balance sheet and support the continued investments we are making as part of our Operation North Star strategic transformation."