Trans World Entertainment Shareholders Approve FYE Sale

Shareholders of fiscally challenged Trans World Entertainment Corp. have overwhelmingly approved the sale of home entertainment retail chain For Your Entertainment (f.y.e.).

New York-based TWEC said a special shareholders meeting held on Feb. 17 saw more than two-thirds of shareholders approve the previously-announced sale of substantially all of the f.y.e. assets to a subsidiary of Sunrise Records and Entertainment Ltd., parent of Sunrise Records in Canada and HMV Records in the United Kingdom, for $10 million in cash.

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The closing of the transaction is subject to the satisfaction or waiver of customary closing conditions set forth in the purchase agreement, including the receipt of certain third party consents which are expected shortly. All of the proceeds from the Transaction will be used to repay outstanding indebtedness and to satisfy other assumed liabilities.

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Indeed, f.y.e., which operates more than 200 mall-based locations across the country, and has hailed itself as the last standalone packaged-media retailer, reported an operating loss of $21.5 million, with revenue down 14.7% to $40.8 million in the most-recent fiscal period. Comparable store sales declined 5.2% — the drop largely buttressed by gains in collectables revenue. And eTailz.com, the e-commerce middleman acquired in 2016 for $75 million, lost $1.4 million.

Trans World Entertainment Selling f.y.e. Retail Chain

Trans World Entertainment Jan. 23  announced it is selling its flagship f.y.e. (For Your Entertainment) home entertainment retail chain to Sunrise Records and Entertainment Ltd. for $10 million.

The deal, pending shareholder approval, would transfer the retail brand (operating in U.S. malls and Puerto Rico) and web properties (www.fye.com and www.secondspin.com) to the parent of Sunrise Records in Canada and HMV Records in the United Kingdom.

The move comes as TWEC struggles to sustain operations in a rapidly changing retail landscape, in addition to misfires at its eTailz.com e-commerce business.

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The transaction, which was unanimously approved by the board,  follows a process in which the board said it explored all strategic alternatives. The deal is expected to close in the first quarter of 2020.

Until the deal is finalized, Trans World Entertainment will continue to operate its business in the ordinary course, and thereafter Sunrise anticipates keeping substantially all of the current FYE employees.

Following the closing, TWEC plans to focus on the operation of etailz, a Spokane, Wash.-based middleman for third-party sellers on the Internet.

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The f.y.e. chain, which operates more than 200 locations across the country, and has hailed itself as the last standalone packaged-media retailer, reported an operating loss of $21.5 million, with revenue down 14.7% to $40.8 million in the most-recent fiscal period. Comparable store sales declined 5.2% — the drop largely buttressed by gains in collectables revenue. And eTailz.com, the e-commerce middleman acquired in 2016 for $75 million, lost $1.4 million.