January 23, 2020
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.
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.
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.