LOS ANGELES -- Price Club is currently in the running to build an 800,000-square-foot retail sitein Burbank, Calif., that would provide the company with its largest development to date.
The deal, if successful, would add to Price Club's already impressive real estate portfolio: the retailer currently owns 37 of its o9 membership warehouse club sites.
Price Club also reported that its sales eclipsed the $4 billion mark for the just-completed fiscal year, ending Aug. 28. Volume increased more than 25 percent to $4.05 billion, as net income gre 29.2 percent to $94.8 million.
For the fourth quarter, sales increased 25.3 percent to $985.6 million, while net income rose 26 percent to $24.1 million in the quarter. Comparable sales increased 12.97 percent in the fourth quarter and 5.52 percent in the full year.
Price Club currently operates 40 warehouses in the United Sttaes and three locations in Canada through a joint venture with Steinberg Inc.
In addition to its own retail real estate holdings, Price Club has an interest in numerous other properties through P&K Associates--a joint venture created in 1985 between The Price Co. and Kornwasser and Friedman Shopping Center Properties. The 41-acre Burbank site currently under consideration would be developed by P&K.
P&K currently is planning, developing or managing some 30 real estate projects. According to the company, these holdings total more than 7.8 million leasable square feet and are valued at $501 million, with total financing for the projects being generated internally.
At the Burbank site, P&K plans to develop a two-level retail center that would include a 120,000-square-foot Price Club membership warehouse, a home center, several off-price apparel chains, a movie theater complex, restaurants, a hotel and a community center. Total leasable square footage would be 708,700 square feet.
P&K's proposed development, called the Burbank Promenade, is one of six under consideration by the city's redevelopment agency.
In its proposal, P&K said the Promenade would have a festival marketplace ambience similar to Faneuil Hall in Boston, combined with a regional shopping flavor resembling the Potomac Mills complex in Washington, D.C.
P&K has already lined up several retailers interested in the project, with the list including off-pricers Nordstrom Rack, Marshalls and T.J. Maxx, along with home furnishings retailer Home Express and home center operator Home Depot. P&K also anticipates that its project would draw either a Toys "R" Us or SportMart.
The Price Club warehouse would be the chain's second in Burbank. The company pegged anticipated first full-year sales at between $120 million and $150 million. For the entire development, P&K expects the proposed Promenade to generate sales of between $273.5 million and $365.7 million.
A final decision by the city for the Burbank development is not due for several months. If chosen, P&K said it would take between two and three years to build the Promenade.
Meanwhile, Price Club's bid for additional real estate, through the purchase of grocery wholesaler Alfrred M. Lewis, has been revised. Following closer review of Lewis, Price Club has downgraded its offer from $40 a share or a total price of $52 million, to $37 share or a total price of $48.1 million.
Price Club said it has begun a tender offer and upon receiving at least 70 percent of Lewis' outstanding shares, along with regulatory approval, the acquired company will be merged with a Price Club subsidiary. The deal would give the company five large warehouse/distribution centers in California, Nevada and Arizona--ranging from 171,000 to 483,000 square feet. The chain would also take over 35 small cash and carry wholesale food distribution outlets.
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