Department Stores

Carson Pirie Scott & Co.

The Company

The only regional department store featured in this Snapshot, among the few that still have survived, Carson Pirie Scott <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CRP)") else Response.Write("(NYSE: CRP)") end if %> operates department stores under the trade names of Carson Pirie Scott, Boston Store and Bergner's. Each of these trade names has strong regional recognition and an operating tradition approaching or exceeding 100 years. The company believes that it is the largest or second largest traditional department store retailer in terms of revenues in each of the greater Chicago, Milwaukee, and central Illinois regions.

The company is a prime acquisition target due to its low valuation, trading at a scant 0.48x sales and 5x operating earnings to enterprise value, with a trailing PE of 14. It has one of the cleanest balance sheets of the group, with long-term debt-to-equity of 12% and ample cash flow. Its only significant downside is its dismal margins.

Latest Financials

Sales increased 9.0% to $258.1 million in the first quarter of 1997 from the prior year's sales of $236.8 million. Sales rose 4.0% on a comparable-store basis. EBITDA (earnings before interest, taxes, depreciation, amortization and other non-cash items) increased 20% to $14.1 million in 1997 from $11.8 million in 1996. The EBITDA rate for the first quarter increased 50 basis points from 5.0% in 1996 to 5.5% in 1997. The EBITDA improvement resulted from leveraging of fixed expenses across a substantially larger sales base.

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