As it upgrades warehouse and logistical capabilities, Big Lots has completed the sale of its distribution center in Rancho Cucamonga, CA.
The company sold the facility as a consequence of a move to a new distribution center in Apple Valley, CA., a 1.4 million square foot facility that will improve speed to market, capacity and service to stores with advanced automation including an automatic storage retrieval system, robotic depalletizers, carton shuttles and carton sortation equipment. The company will operate the Rancho Cucamonga distribution center on a leaseback arrangement until the Apple Valley distribution center is fully operational in spring 2020.
Cash consideration for the sale was $191 million, of which the company reinvested $69 million to exercise a purchase option on its corporate headquarters in Columbus, OH. Net after-tax proceeds of $90 million will pay down a portion of the outstanding balance on the company’s unsecured line of credit. Big Lots will recognize a one-time, pre-tax gain of $179 million in the fiscal 2019 third quarter.
Ronald Robins, Jr., Big Lots evp/general counsel and corporate secretary, said, “We are pleased to complete the sale of our legacy California distribution center as part of the transition to our new, state-of-the-art distribution center. The net proceeds, in addition to allowing us to effect a like-kind exchange for our corporate headquarters, will strengthen our balance sheet and support the continued investments we are making as part of our Operation North Star strategic transformation.”