Retail News

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Amazon/Whole Foods

According to published reports, Amazon will re-file documents this week seeking government approval for its $13.70 billion deal to acquire Whole Foods. The move will allow antitrust officials to prolong their review of the deal first proposed in June. The government’s 30-day review period of the acquisition began on June 23; Amazon’s re-submission would restart the process and show their cooperation in the process by easing some of the deadline pressures. Several officials, some within the government, have urged for a thorough review of the deal, analyzing what it might mean for Amazon’s online footprint as well as the future of grocery stores.

Meanwhile, in a July 19 filing with the SEC, activist investor Jana Partners LLC indicated that it has sold its shares in Whole Foods. Jana Partners held approximately 26 million shares in the Company, or an 8% stake. Prior to Whole Foods’ recent entry into the purchase agreement with Amazon, Jana Partners had been agitating for changes and exploration of a potential sale. Jana subsequently sold its shares for a $300.0 million profit.

Separately, published reports indicate that Amazon plans to meet tomorrow with a dozen U.S. ranchers, seeking to expand distribution of organic and grass-fed meats as it takes over Whole Foods. There has been speculation that Amazon is aiming to combine its expertise in order fulfillment with Whole Foods’ facilities to build out delivery of fresh food.

In other news, on July 21, Whole Foods Market opened its 12th New York City location in Harlem. The 40,000 square-foot store features expanded prepared food offerings including a Kebab grill and Cuban sandwich venue.

Amazon has reportedly made a bid to acquire Indian digital payments startup FreeCharge from e-commerce operator Snapdeal. The offer is said to be worth $50.0 million –$80.0 million. Snapdeal’s parent Jasper Infotech Pvt is also in talks with multiple other parties. Acquiring FreeCharge would help Amazon expand its technology into point-of-sale and other areas. In May, Amazon acquired Graphiq to help make Amazon’s voice assistant Alexa smarter. Graphiq allows users to search a topic and get complex sets of data on that subject, presented in easily digestible charts.

Kroger/Marsh Supermarkets

Kroger recently took possession of 11 shuttered Marsh stores it acquired as part of Marsh’s Chapter 11 asset sale. The Company expects to spend about $20.0 million updating seven buildings, including three Indianapolis-area stores. Two will reopen under Kroger’s Pay Less banner and the other five will reopen as Kroger stores. Former Marsh stores in Anderson, Lafayette and West Lafayette were also reopened as Pay Less stores. The Company has not decided what to do with four other stores, located in Indianapolis, Fishers, Greenwood and Bloomington, IL. It has been suggested that Kroger may be contemplating keeping these locations dark and possibly selling the buildings. Kroger did not provide a timeline for reopening the former Marsh stores.

In other news, Kroger is planning to build a Marketplace store at the site of a former Kmart in Norfolk, VA. City officials said they did not know when construction will begin or when the Marketplace will open. In Norfolk, the Company also operates a smaller Kroger store and a Harris Teeter store.

Camping World/Gander Mountain

On June 30, it was previously reported that Camping World plans to reopen 57 of the Gander Mountain, DIP stores it acquired at the bankruptcy auction. The stores will be remerchandised and reopened under the new Gander Outdoors banner. The openings will be phased in, with the first 20 planned to occur in November. Camping World’s liquidity should be adequate to fund the initial working capital requirements to accomplish the remerchandising. However, there are many more hurdles to overcome after this initial step. Mr. Lemonis will need to resurrect the Gander business while concurrently keeping his foot on the pedal at Camping World. A misstep in one arena could hamper progress in the other.  

Hy-Vee

Hy-Vee plans to invest a total of $86.0 million in its food production facility in Ankeny, IA (Perishable Distributors of Iowa [PDI]). The Company plans to spend $21.6 million to add 108,000 square feet to its 350,000 square-foot warehouse, which will include additional docks, a floral distribution warehouse and additional freezer space. It will spend $64.0 million to construct a new 200,000 square-foot warehouse dedicated to its central bakery, prepared foods and meal kits.

Wawa

Wawa will open two new stores on July 27 located in Davie and Pompano Beach, FL (both are located in Broward County). Wawa opened its first Florida store in 2012 and currently has 113 stores in the state. The Company announced plans to open 11 stores in Broward and Palm Beach Counties. The first three Wawa stores in Palm Beach opened in March. 50 Wawa stores are set to open in both counties in the next five years.

Belk/The Bon-Ton Stores

Belk plans to open a new store in the Valley Mall in Hagerstown, MD; an opening date has not been confirmed. Within the same mall, The Bon-Ton Stores announced back in February it was shuttering its 123,000 square-foot location there when the lease expires in February 2018. At the time, the mall’s general manager Julie Rohm said that a new retailer had executed a lease to fully occupy the space, with an anticipated 2018 opening. Belk, owned by Sycamore Partners, operates 293 stores in 16 southern states. The closest Bon-Ton stores to Hagerstown are located in Martinsburg, WV and Chambersburg, PA, while Belk operates two Maryland stores in California and Westminster.

With roughly 4,000 major retail chain store closings last year and up to another 10,000 expected in 2017, brick-and-mortar retailers are scrambling to remain relevant. Out 20-page Store Activity and Retailer Health Analysis report includes a list of retailers adding and closing stores in 2017 and provides insight into companies expanding into new markets. Click here for more information.

Williams-Sonoma

West Elm, a subsidiary of Williams-Sonoma, will open its first store in Maine, a 12,000 square-foot unit in Portland, on July 27. The store will sell an assortment of local products highlighting 10 Maine-based makers and designers alongside the brand’s fall assortment. Additionally, it will offer a design consultation program, called Style + Service, which provides customers design, installation and registry services. West Elm operates 100 retail stores in the U.S., Australia, Canada and the U.K.

Associated Wholesale Grcoers

Associated Wholesale Grocers announced the closure and sale of its Fort Worth, TX distribution center, which the Company acquired from Albertsons in 2007. After Albertsons acquired Safeway in 2015, it moved to self-distribution in the Dallas area, though the Company indicated it continued to be a (limited) supplier to Albertsons in the market. The remaining business in the Fort Worth division will be consolidated into AWG’s Oklahoma City DC. Neither the buyer nor terms of the sale of the Fort Worth facility were disclosed.

Smart & Final

Cash&Carry Smart Foodservice, the foodservice division of Smart & Final, will open a new warehouse format store in Wenatchee, WA on August 12. The 23,000 square-foot store will carry more than 8,000 products including fresh produce, deli, frozen foods, grocery products, janitorial supplies, catering supplies, and tableware, among other things. It will be Cash&Carry’s 24th store in Washington and 61st in the Western U.S.

Kwik Trip

Kwik Trip has announced plans to acquire PDQ Food Stores, which is employee owned and has 34 Company-operated convenience stores in southern Wisconsin. Kwik Trip will invest $30.0 million – $40.0 million to renovate the PDQ stores. Kwik Trip plans to operate the acquired stores under the existing PDQ banner until planned remodels and reimaging are completed in mid-2018. The transaction is expected to close in early October.

Sears

On July 20, Sears Holdings Corporation announced the launch of Kenmore products on Amazon.com, as well as the integration of Kenmore Smart appliances with Amazon Alexa. This marks the broadest distribution of Kenmore outside of Sears’ stores and online platforms. Sears Home Services will provide delivery, installation and extended product protection for all Kenmore goods sold through Amazon. Terms of the deal were not disclosed. On the news, Sears shares were up 10.6% to close at $9.60 last Thursday, but have since retreated to $8.40 as of yesterday.

Separately, Sears is closing its last Kmart store on Oahu, which will leave the Company with just two Kmart locations in Hawaii. The 135,000 square-foot store is expected to close in the next two or three months. The store was not on a list of upcoming store closures released by Sears. The Company closed its last Kmart store on Maui last month, and earlier this year shuttered the last Honolulu store. The only two remaining Kmart stores in Hawaii are located on Kauai and on the Big Island.

Sears Canada

Sears Canada, DIP announced a joint venture group formed among Hilco Global, Gordon Brothers, Tiger Capital Group and Great American Group began liquidation sales on July 21 at the 54 stores previously announced by the Company as closing. The stores include 20 full-line, 15 Sears Home, 10 Outlet and nine Hometown locations.

Central Grocers

The Court approved the sale of 20 Central Grocers, DIP, stores and other assets to the Jeff Strack-led Indiana Grocery Group. The deal is expected to close between August 2 and September 11. Central Grocers, DIP filed a notice indicating that with a cash purchase price of $61.0 million, Supervalu was the successful bidder for its Joliet, IL distribution center. A back-up bid of $59.0 million was submitted by Ridge Haven Avenue Partners, LLC and AREP Fund II Acquisition Sub, LLC. A sale hearing is set for today. The Official Committee of Unsecured Creditors filed an objection to the proposed sale to Supervalu and stated the sale process should be renewed because the $61.0 million sale price is just a fraction of the (undisclosed) appraised value issued on August 1, 2016 and will almost certainly cause the Debtors’ estates to be administratively insolvent.

Meanwhile, PNC, the Debtors’ prepetition and post-petition lender, responded to the Unsecured Creditors Committee’s objection, noting that the lenders “have gone to great lengths to fund these Chapter 11 Cases. For example, post-petition trade vendors are being paid; $10.5 million was segregated to pay valid PACA/PASA claims (of which more than $4.3 million already has been distributed); a reserve was established to cover post-petition utilities; millions of dollars in employee wages and benefits, including PTO, severance and WARN Act obligations, were funded and continue to be funded; payments to critical vendors were authorized up to $3.4 million; landlords were paid stub rent and post-petition rent; sale and marketing expenses are being paid; the Office of the United States Trustee’s fees will be paid; and a generous professional fee budget and Carve-Out are being funded.” PNC claims several bidders already participated in the auction of the distribution center, and the Debtors need to wind down the case; it claims the costs to maintain the distribution facility are several hundred thousand dollars per month.

RadioShack

An affiliate of Kensington Capital Holdings will acquire RadioShack’s intellectual property for $15.0 million, according to published reports. Kensington provided the Company with a $23.0 million loan following its first bankruptcy two years ago. Kensington plans to license the RadioShack brand back to General Wireless, which does business as RadioShack. The Company now has 425 independent dealer stores, an e-commerce business, and fewer than 100 brick-and-mortar stores in operation.

Everlane

Everlane, an online apparel brand, will open its first permanent brick-and-mortar location in San Francisco, CA; no opening date has been set. The brand previously opened a series of pop-up shops in New York City and last year opened a showroom inside its headquarters, showcasing and selling existing and new products. Everlane was founded in 2010 as a direct-to-consumer brand selling modern basics for men and women; on its site the Company discloses how much it costs to make each item, breaking it down by materials, labor, duties and transport.

Ahold Delhaize

Ahold Delhaize is closing a smaller Stop & Shop in Medford, MA by the end of August and expanding a larger store nearby. Renovations to the 45,000 square-foot store include expanded organic, seafood and produce departments. Stop & Shop also recently opened a new store in Litchfield, CT that replaced an older 24,500 square-foot store located about a quarter-mile away. The new 37,000 square-foot store features expanded departments and a sushi chef.

Subway

Subway revealed its “Fresh Forward” redesign that it plans to bring to its 44,000 global locations over the next few years. The remodel combines new décor with updated technology, including self-ordering kiosks and charging ports. The Company expects 3,000 – 5,000 new and remodeled locations in the new design to open by the end of next year, about 85% of them in North America.