Walmart
On January 11, Walmart announced it was closing 63 of its membership warehouse Sam’s Clubs; click here for a complimentary geo-coded list. Ten of the locations will close immediately with the remainder to be closed over a three to four week period. The Company indicated that 10 or 12 of the locations are to be converted to regional distribution centers to enhance the Company’s ability to fulfill online orders and in-store purchases.
As of October 31, 2017, there were 660 Sam’s Club warehouses. At the Company’s 2017 fiscal year end dated January 31, 2017, Sam’s Club reported revenues of $57.37 billion and operating income of $1.67 billion. The Company is closing approximately 10% of its store base representing an estimated $5.00 billion to $5.50 billion in sales.
AggData has compiled a list of competitors that overlap with the 63 locations; click here for more information.
Grocery Outlet
Grocery Outlet reportedly plans to open 25 new stores in 2018, primarily in existing markets of California, Oregon, Washington, Idaho, Nevada and Pennsylvania. Fourteen of the discount grocer's new locations will be in Los Angeles. Published reports indicate that the Company sees an opportunity to provide affordable stores in underserved neighborhoods.
Earth Fare
On January 10, Earth Fare opened a new store in Fairfax, VA, its second store in the state. The new store features a juice bar, prepared organic foods, and a 44-seat café. Earth Fare operates 45 locations across 10 states in the Southeast and Midwest.
The Sports Zone, Inc., DIP
A stalking horse bid for substantially all the assets of The Sports Zone, Inc., DIP was made by New Jersey apparel wholesaler Halifax of Palisade LLC. The asset purchase agreement provides that Halifax will make payments of $900,000 for the Debtors’ assets, and for the assumption and assignment of the remaining store leases (other than the Georgetown store). The Bankruptcy Court scheduled an auction for January 25, with a sale hearing to be held on January 30.
On December 15, the Company filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of Maryland. Sports Zone operates 11 retail stores in Washington D.C., and the Maryland and Virginia suburbs, selling footwear, clothing and accessories.
Bashas'
Bashas’ recently reopened two remodeled stores, including a Bashas’ in Phoenix, and a Food City in Tucson, AZ. Expanded offerings include value aisles, more prepared foods and in the Phoenix store, a Starbucks and Optium Hearing Center.
Wells Fargo
Wells Fargo plans to cut costs and offset soaring legal expenses by closing 800 more bank branches by 2020. The planned closings, announced Friday, will leave Wells Fargo with about 5,000 branches. The Company closed more than 200 branches last year, but still finished the year with more than 5,800. On a call with Wall Street analysts, Wells Fargo representatives cited increased online and mobile banking as the main cause of the closings.
Aldi
Aldi will open its second store in Naperville, IL in mid-2018. According to a Company representative, the 24,800 square-foot store will “showcase the new Aldi look," with modern and convenient features and a focus on "fresh items, including more robust produce, dairy and bakery sections."
Kroger
Kroger is reportedly considering acquiring online wholesaler Boxed, which sells bulk staples. The potential deal, which is said to have arose as the NY-based start-up was seeking funding, values Boxed at between $325.0 million and $500.0 million, according to a source familiar with the matter. Boxed is also considering a sale to several other potential suitors, with Aldi, Costco, and Target mentioned as possible buyers.
AggData's Future Store Closing Database Currently Contains 100+ Locations Scheduled To Close In 1Q 2018.
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RadioShack
In the General Wireless Operations Inc., DIP dba RadioShack Chapter 11 case, the Court entered an order declaring the Plan of Reorganization effective and stating that the Plan has been substantially consummated. Following the exit from Chapter 11, General Wireless Operations Inc. will operate the Company’s warehouse, e-commerce site, and dealer network, and up to 28 Company-owned stores.
Stater Bros.
Stater Bros. will open a 42,000 square-foot store in Pasadena, CA. It plans to open the store in fall 2018, following a major remodel of the space.
Nordstrom
Nordstrom reported results for the nine-week holiday period ending December 30. Net sales rose 2.5%, and comparable sales were up 1.2%, reflecting improvement in Nordstrom full-line and Nordstrom Rack stores as well as continued growth in e-commerce at Nordstrom.com and Nordstromrack.com/HauteLook. In the Nordstrom brand, including U.S. and Canada full-line stores and Nordstrom.com, net sales combined with Trunk Club increased 0.7%, and comps increased 1.%. In the Nordstrom Rack brand, consisting of Nordstrom Rack stores and Nordstromrack.com/HauteLook, net sales increased 8.2%, and comps rose 2.9%.
The Company updated its fiscal 2017 expectations for a sales increase of approximately 4.2%, inclusive of the 53rd week, and an increase in comps of about 0.5%. Nordstrom expects full-year EPS of $2.90 to $2.95, compared with its prior outlook of $2.85 to $2.95. This reflects sales near the high end of the Company’s outlook, continued stability in merchandise margins, and deleverage from higher supply chain, technology, and occupancy expenses associated with Nordstrom’s growth initiatives; it does not include the impact of tax reform. Nordstrom is scheduled to report fourth quarter and fiscal 2017 results after market close on March 1.
Wegmans
Wegmans Food Markets closed on a deal to buy a 20-acre land parcel in Harrison, NY, where it received approval for a 125,000 square-foot store. A projected opening date is not yet available.
Natural Grocers by Vitamin Cottage
Natural Grocers by Vitamin Cottage will open two new stores in the Dallas-Fort Worth area early this year. The first will open on January 24 in Keller, and the second on February 7 in North Fort Worth. Natural Grocers currently operates 21 stores in Texas and 142 in 19 states.
Signet Jewlers
Signet Jewelers announced its sales for the nine weeks ended December 30. Total sales were down 3.1% to $1.88 billion. Sales declines were primarily driven by weakness in the Sterling division, impacted predominantly by the credit outsourcing transition, which accounted for approximately two-thirds of the decrease. eCommerce sales jumped 47.7% to $210.5 million, with growth led by the Sterling division, reflecting the R2Net acquisition and the successful implementation of several enhancements to its OmniChannel platforms, search efficacy, functionality, and digital and social media marketing. Total same-store sales decreased 5.3%. CEO Virginia C. Drosos commented, “During the Holiday Season, we made positive progress on our strategic priorities, offset primarily by the negative impact of the credit outsourcing transition, as evident by the mixed performance across our banners and channels. Our overall eCommerce business grew double-digits, and our Zale division, where our strategic initiatives are beginning to take hold unencumbered by the credit transition, delivered same store sales growth with strength in both bridal and fashion. Conversely, progress in our Sterling division was overshadowed by the negative impact of the credit outsourcing transition in stores.”
Looking ahead, Signet now expects fourth quarter comps to be down by mid-single digits and EPS of $6.17 to $6.22, compared to prior guidance of $6.10 to $6.50. The Company currently estimates the deferred tax impact of U.S. tax reform to result in a one-time non-cash benefit currently estimated at $35.0 million to $45.0 million that will be recorded in the fourth quarter, estimated to add $0.50 to $0.67 to EPS in the fourth quarter and in fiscal 2018.
Supervalu
Last week Supervalu reported earnings for its third quarter ended December 2, 2017. Third quarter sales increased 31% driven by a 52% jump in Wholesale sales, related to acquisitions including Unified Grocers. Wholesale EBITDA was up a much lesser 11%, as the Unified business had thinner margins and the surge in volume, especially in certain DCs, caused capacity issues and higher trucking and temporary storage costs along with elevated employee overtime costs. Excluding gains from Unified and the loss of Marsh, the Wholesale growth rate was still about 10%. AG Florida will start to be included in results for the fourth quarter. Wholesale sales are now 72% of overall sales with a run-rate of 75%. Retail sales fell 4%, comps fell 3.5% and EBITDA margin tumbled 42% to a 1.4% margin. The Company is pushing its fresh/organic offerings as well as private label to move Retail sales. It also signed a multi-year agreement with Instacart to deliver goods to most of its Corporate Retail store customers within an hour. The Company continues to emphasize that “there are banners we operate that are doing well and where we’re spending capital to remodel stores, selectively add stores as well as test and introduce merchandising and service concepts. But we also have other retail markets where the answer is to optimize and maximize cash flow and the investment here is focused on maintenance capital.” The Company has closed five underperforming retail stores (3 Farm Fresh and 2 Shop ‘n Save) over the past four quarters and plans to close an additional five in the coming months.
At third quarter ended December 2, 2017, the Company had borrowed $110.0 million (net of $55.0 million in letters of credit) under its $1.00 billion ABL facility, leaving $835.0 million in availability plus $46.0 million in available cash. The $193.0 million AG Florida acquisition was completed on December 8, which we assume would have been funded with revolver borrowings, while declining working capital should boost liquidity in Q4 after the normal surge to support 3Q holiday working capital needs. The Company indicated that any potential (cash flow) benefits from tax reform would be used to pay down debt and invest in operations. The Company also continues, “to evaluate shareholder enhancing opportunities for certain assets including owned real estate and underperforming retail stores…we’re working with a nationally renowned real estate advisory firm to help us think through sale leasebacks toward our real estate portfolio.”
GameStop
Last week, GameStop reported sales results for the nine-week holiday period ended December 30. Total sales for the period jumped 10.6% to $2.77 billion, while total comparable store sales increased 11.8%, up 13.7% in the U.S. and 7.9% internationally. Worldwide omnichannel sales increased 21.5%. Interim CEO Dan DeMatteo stated, “We are pleased with our sales performance during the important holiday period, driven by strength in the Nintendo Switch and Xbox One X, and a solid increase in our collectibles business. Our results demonstrate our customers’ enthusiastic response to new products and our ability to execute on strategically targeted promotions.” The Company expects to deliver adjusted EPS near the middle of its previously announced full-year guidance of $3.10 to $3.40 and anticipates full-year comps to increase 4% to 6%.
GameStop concluded that a non-cash, pre-tax impairment charge of $350.0 million to $400.0 million will be recorded in the fourth quarter of the fiscal year ending February 3, primarily associated with acquired dealer agreement intangible assets and goodwill in its Technology Brands segment. The conclusion was made in connection with GameStop’s annual impairment testing of goodwill and intangible assets, which is not yet finalized. While the Technology Brands segment remains profitable, recent financial performance measures indicate that future sales and profitability no longer support the entire carrying value of its goodwill and intangible assets. No cash expenditures are anticipated as a result of the charge.
Arby's Restaurant Group
On January 11, Arby's Restaurant Group announced that its newly formed parent entity, IRB Holding Corp., intends to commence an offering of $485.0 million of its Senior Notes due 2026. Net proceeds will be used to help finance its pending acquisition of Buffalo Wild Wings, refinance certain existing indebtedness of Buffalo Wild Wings, and pay fees and expenses related to the transactions. Arby's announced in November that it is acquiring Buffalo Wild Wings for $157 per share in cash, in a transaction valued at approximately $2.90 billion. The transaction is expected to close during 1Q18.
The Jean Coutu Group
Jean Coutu reported third quarter sales fell 0.6% to C$758.9 million, largely due to a lower contribution from Pro Doc and the timing of shipments of front-end products compared to last year. OIBA (EBITDA) decreased by C$13.5 million to C$66.4 million, and sales of Pro Doc drugs were down 15.9% to C$43.0 million. PJC’s networks retail sales increased 3.4%, pharmacy sales rose 4%, and front-end sales increased 2.5%. Sales of non-prescription drugs, which represented 9% of total retail sales, were up 2.9%. Generic drugs reached 72% of prescriptions, compared with 71.4% last year. The introduction of new generic drugs reduced pharmacy’s retail sales growth by 0.1%, and price reductions of generic drugs reduced retail sales growth by an additional 0.5%. The elimination of pharmacist fees on April 12 by the government increased retail sales of the pharmaceutical section by 1.2%. Net income fell 17.8% to C$42.1 million, mainly due to the decrease of Pro Doc’s contribution to net profit. During the third quarter, there were three openings in the PJC network of franchised stores, including 2 relocations, and one store was closed.
