Trans World Entertainment Sells South Beach Property For $30 Million

Albany-based Trans World Entertainment Corp., owner of the FYE music and video chain, sold real estate in South Beach, Miami for $30 million and will pay its first-ever cash dividend to shareholders.
The company announced both moves this morning, becoming the latest to pay a special dividend before income tax rates on dividends potentially double on Jan. 1 under the so-called fiscal cliff.
Dividends are currently taxed at 15 percent.
The property at 501 Collins Ave. in swanky South Beach, Miami, is leased to Walgreens.
Trans World bought it in 2004 for about $8 million, according to acting Chief Financial Officer John Anderson.
The FYE on the site closed in 2009. The 23,000-square-foot building was later converted to a Walgreens.
Trans World will use half the proceeds from the real estate sale to pay the cash dividend and re-invest the remainder in the company for future growth, Anderson said.
The company will pay a cash dividend of 47 cents per share to shareholders of record as of the close of business on Dec. 10, a payout that is estimated will cost $15 million when it’s made on Dec. 26.
“We are pleased to reward our shareholders with a special dividend,” Chairman and CEO Robert Higgins said in a prepared statement. “We continue to maintain strong financial flexibility and working capital to fund our growth initiatives.”
The company finished the third quarter with $60 million in cash, which spurred some shareholders to press the company to reward them for years of sticking by the retailer during the sharp downturn in sales.
Trans World finished fiscal 2011 with a $2.2 million profit, its first since 2006.
The company narrowed its losses in this year’s third quarter, to $2.2 million, on sales of $91.8 million. The company operated an average of 378 stores during the quarter.
Trans World shares (TWMC) closed at $3.61 Tuesday on the Nasdaq. As of noon Wednesday, it was trading at $3.90, up 29 cents, or 8 percent.
 
Source: The Business Review