updated 03:45 pm EDT, Tue March 25, 2008
Creative Selling HQ
Creative has revealed that it will sell its Singapore company HQ for $180 million. The company says it plans to remain at the building but will release actual ownership of the location to an unnamed buyer. Under an agreement signed for the transfer, Creative will remain in the building and lease it for at least five years; the option will exist for two extensions of three and then two years if the company prefers to stay. The new terms will generate a $144 million profit on the building over the course of the next five years.
Creative doesn't directly explain the reasons behind the sale but accompanied the notice with word that it now expects to suffer an operating loss for the quarter through a combination of lower revenues and higher expenses due to currency exchange rates. The change of ownership for the Singapore headquarters as well as the sale of other investments will still result in a $20 million gain, the company says.
The move also follows a series of difficult quarters for Creative, which has struggled to gain marketshare versus rivals such as Apple and SanDisk, particularly in the US. The Singapore firm has regularly focused on competing with its price advantage and, since receiving a $100 million patent settlement from Apple, has also diversified its offerings with iPod speaker and wireless docks.