UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Retail Ventures, Inc.

(Exact name of registrant as specified in its charter)

Ohio		1-10767		20-0090238
(State or other jurisdiction		(Commission		( IRS Employer
of incorporation)		File Number)		Identification No.)

4150 E. Fifth Avenue, Columbus, Ohio		43219
(Address of principal executive offices)		(Zip Code)

(614) 238-4148

Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

     On April 21, 2009, Retail Ventures, Inc. (“RVI”) announced it had entered into, and consummated the transactions contemplated by, a definitive agreement dated April 21, 2009 (the “Purchase Agreement”) to dispose of its wholly-owned subsidiary Filene’s Basement, Inc. (“Filene’s Basement”) and certain related entities to FB II Acquisition Corp., a newly formed entity owned by Buxbaum Holdings, Inc. (“Buxbaum”). RVI will not realize any cash proceeds from this transaction and will pay a fee of $1,300,000 to Buxbaum and has reimbursed $375,000 of Buxbaum’s costs associated with the transaction. RVI has also agreed to indemnify Buxbaum, FB II Acquisition Corp. and their owners against certain liabilities. As of the transaction date, RVI estimates an amount of $42.5 million for the guarantees of Filene’s Basement commitments, including, but not limited to $13.8 million of outstanding borrowings against the Filene’s Basement Revolving Loan (as defined below); $6.6 million of payments to factors for inventory purchases made by Filene’s Basement prior to the disposition date; $12.6 million under lease obligations; and $9.5 million under certain laws related to certain employee benefit plans.

     In connection with the disposition and related transactions, RVI and Filene’s Basement obtained consent from the lenders under Filene’s Basement’s secured credit facility led by National City Business Credit, Inc. (the “Filene’s Basement Revolving Loan”), pursuant to a Consent and Ratification Agreement, dated as of April 21, 2009, by and among National City Business Credit, Inc., as Administrative Agent and Collateral Agent, the Revolving Credit Lenders (as defined in the Filene’s Basement Revolving Loan), Filene’s Basement, RVI, and FB II Acquisition Corp. (the “Consent Agreement”). Under the Consent Agreement, RVI has reaffirmed its existing guaranty of the Filene’s Basement Revolving Loan, provided that the aggregate principal amount of the guaranteed debt will not be increased following any commencement of a bankruptcy case by Filene’s Basement’s, except to the extent the increase arises as a result of a drawing on an existing letter of credit under the facility or the incurrence of any costs of collection. As previously disclosed, RVI had an arrangement with the lenders under Filene’s Basement’s Revolving Loan pursuant to which RVI has agreed to acquire a $7.5 million Last Out Participation in that secured credit agreement, which is included in the $13.8 million loan balance referred to above. In addition, RVI has paid a consent fee of $0.1 million to the Revolving Credit Lenders and has agreed to maintain an additional $2.5 million in an account at and controlled by one of the lenders until the lenders have been paid in full. Under certain circumstances, the bank in which such funds are held would have the right to set-off this amount against RVI’s obligations under its guaranty. There can be no assurance that all of the terms and conditions to the Consent Agreement, some of which are not within the control of RVI, will be satisfied.

     The descriptions of the Purchase Agreement and the Consent Agreement herein are qualified in their entirety by reference to the Purchase Agreement and the Consent Agreement, which are Exhibit 2.1 and Exhibit 10.1 hereto, respectively, and are incorporated herein by reference.

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

     The information set forth in Item 1.01 of this Form 8-K is hereby incorporated into this Item 2.01 by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

     (b) Pro Forma Financial Information.

     The following unaudited pro forma consolidated financial information of the Company is derived from the Company’s historical consolidated financial statements and should be read in conjunction with the audited financial statements and notes thereto appearing in the Company’s Annual Report on Form 10-K for the year ended February 2, 2008 and the Company’s Quarterly Report on Form 10-Q for the period ended November 1, 2008. The accompanying unaudited pro forma condensed consolidated statements of income for the nine months ended November 1, 2008 and the year ended February 2, 2008 are presented as if the disposition of Filene’s Basement as discussed in Item 2.01 hereof, had been completed as of February 3, 2008 and February 4, 2007, respectively. The unaudited pro forma condensed consolidated balance sheet is presented as if the disposition had been completed as of November 1, 2008.

     The unaudited pro forma financial information is for informational purposes only and does not purport to present what our results would actually have been had these transactions actually occurred on the dates presented or to project our results of operations or financial position for any future period. The pro forma adjustments, as described in the notes to the unaudited pro forma consolidated financial statements, are based upon available information and certain assumptions that we believe are reasonable. The allocations are preliminary in nature and subject to change following the transaction based on refinements as actual data becomes available.

     The unaudited pro forma condensed consolidated financial statements do not include non-recurring charges or credits and related tax effects which result directly from the transaction and will be included in the operating results of the Company in the future. Also not included are guarantees, estimated at $42.5 million as of the transaction date, as discussed in Item 1.01, that will be established in accordance with FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”, for certain guarantees made by the Company. The Company cannot reasonably estimate the amount of the loss on the disposition at this time and therefore, the pro forma condensed consolidated financial statements, do not include the amount of any loss from the disposition.

RETAIL VENTURES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)

		As of November 1, 2008
						Pro Forma				Pro Forma
		As Reported				Adjustments(a)				Adjusted
ASSETS
Cash and equivalents		$	96,526			$	(13,030	)(b)		$	83,496
Restricted Cash			260								260
Short-term investments			84,915								84,915
Accounts Receivable, net			10,712				2,811	(c)			13,523
Inventories			418,664				(99,420	)			319,244
Prepaid expenses and other assets			32,495				(5,768	)			26,727
Deferred income taxes			26,449								26,449
Total current assets			670,021				(115,407	)			554,614
Property and equipment, net			278,753				(39,490	)			239,263
Goodwill			25,899								25,899
Long-term investments, net			4,493								4,493
Notes receivable from Filene’s Basement							52,559	(d)			52,559
Tradenames and other intangibles, net			17,537				(13,655	)			3,882
Conversion feature of long-term debt			52,329								52,329
Deferred income taxes			3,972				(1,578	)			2,394
Other assets			7,351				(645	)			6,706
Total assets		$	1,060,355			$	(118,216	)		$	942,139
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable, net		$	189,103			$	(52,087	)		$	137,016
Accrued expenses:
Compensation			14,611				(4,420	)			10,191
Taxes			35,300				(3,795	)			31,505
Gift cards and merchandise credits			15,166				(2,510	)			12,656
Guarantees from discontinued operations			3,932								3,932
Other			47,304				(8,294	) (e)			39,010
Warrant liability			4,337								4,337
Total current liabilities			309,753				(71,106	)			238,647
Long-term obligations			170,309				(43,000	)			127,309
Other noncurrent liabilities			144,409				(31,408	)			113,001
Deferred income taxes			28,861								28,861
Minority interest			174,469								174,469
Total shareholders’ equity:
Common shares			306,500								306,500
Accumulated deficit			(71,251	)			25,479	(b) (e)			(45,772	)
Treasury shares, at cost			(59	)							(59	)
Warrants			124								124
Accumulated other comprehensive loss			(2,760	)			1,819				(941	)
Total shareholders’ equity			232,554				27,298				259,852
Total liabilities and shareholders’ equity		$	1,060,355			$	(118,216	)		$	942,139

RETAIL VENTURES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)

		Nine Months Ended November 1, 2008
						Pro Forma				Pro Forma
		As Reported				Adjustments(f)				Adjusted
Net sales		$	1,429,575			$	(314,781	)		$	1,114,794
Cost of sales			(821,354	)			192,795				(628,559	)
Gross profit			608,221				(121,986	)			486,235
Selling, general and administrative expenses			(577,729	)			146,096				(431,633	)
Change in fair value of derivative instruments			61,759								61,759
Operating profit			92,251				24,110				116,361
Interest (expense) income, net			(8,649	)			6,686				(1,963	)
Non-operating income			1,486								1,486
Income from continuing operations before income taxes and minority interest			85,088				30,796				115,884
Income taxes benefit (expense)			(24,374	)			(275	)			(24,649	)
Income from continuing operations before minority interest			60,714				30,521				91,235
Minority interest			(12,748	)							(12,748	)
Income from continuing operations		$	47,966			$	30,521			$	78,487
Basic earnings per share from continuing operations		$	0.99			$	0.62			$	1.61
Diluted earnings per share from continuing operations		$	0.96			$	0.62			$	1.58
Basic shares used in calculation			48,665				48,665				48,665
Diluted shares used in calculation			49,803				49,803				49,803

RETAIL VENTURES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)

		Year Ended February 2, 2008
						Pro Forma				Pro Forma
		As Reported				Adjustments(g)				Adjusted
Net sales		$	1,871,904			$	(466,289	)		$	1,405,615
Cost of sales			(1,120,899	)			299,052				(821,847	)
Gross profit			751,005				(167,237	)			583,768
Selling, general and administrative expenses			(687,532	)			185,085				(502,447	)
Change in fair value of derivative instruments			248,193								248,193
Operating profit			311,666				17,848				329,514
Interest (expense) income, net			(3,076	)			7,811				4,735
Non-operating income
Income from continuing operations before income taxes and minority interest			308,590				25,659				334,249
Income taxes benefit (expense)			(86,607	)			14,204				(72,403	)
Income from continuing operations before minority interest			221,983				39,863				261,846
Minority interest			(19,879	)							(19,879	)
Income from continuing operations		$	202,104			$	39,863			$	241,967
Basic earnings per share from continuing operations		$	4.20			$	0.82			$	5.02
Diluted earnings per share from continuing operations		$	3.56			$	0.70			$	4.26
Basic shares used in calculation			48,165				48,165				48,165
Diluted shares used in calculation			56,794				56,794				56,794

(d)

Exhibits.

Exhibit Number				Description
	2.1			Purchase Agreement, dated as of April 21, 2009, by and between Retail Ventures, Inc. and FB II Acquisition Corp.
	10.1			Consent and Ratification Agreement, dated as of April 21, 2009, by and among National City Business Credit, Inc., as Administrative Agent and Collateral Agent, the Revolving Credit Lenders, Filene’s Basement, Inc., Retail Ventures, Inc., and FB II Acquisition Corp.
	99.1			Press Release dated April 21, 2009.

Signature

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 27, 2009