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In an all-Canadian deal that surprised retail observers, hardware and sporting goods icon Canadian Tire Ltd. said Wednesday it will take over clothing retailer Mark's Work Wearhouse for C$116 million ($73.7 million) in cash.
While the two companies are at opposite ends of the retail spectrum, Canadian Tire president and CEO Wayne Sales said the stores have the same customer base and the deal will add to earnings and cash flow in 2002.
Additionally, he said, Canadian Tire expects to realize savings of between C$5 million and C$7 million by leveraging transportation, real estate and advertising costs.
"In terms of financial attractiveness, Mark's has consistently been a top performer delivering double-digit sales growth, Ebitda, net income and other key measures, and the opportunities to accelerate that growth and financial performance under the Canadian Tire umbrella are even better," Sales said during a conference call.
Canadian Tire investors, however, weren't so sure, driving the company's stock price down...