April 12, 2023
GNC said it opened 75 new stores in 2022 and several dozen in 2023 so far, with 88 commitments and another 15 anticipated to open by year end. In addition, GNC introduced a new social selling tool called Salesfloor, through which shoppers can speak with the Company’s coaches through real-time chat or video calls while in store. GNC also launched a fully mobile POS system which allows for curbside pickup, same-day delivery, and online sales at GNC.com. The Company is also opening a Pittsburgh flagship store this summer, located less than one mile from its global headquarters, with 2,400 square feet of retail space.
In the Party City, DIP case, the Debtors filed a Plan of Reorganization under which the Company will deleverage its balance sheet and gain access to significant new capital to fund post-emergence operations. Highlights include:
• The issuance of new common stock, under which Holders of Allowed Secured Notes Claims will receive 100% of the New Common Stock;
• An equity rights offering, based on the sale of $75 million of equity in the Reorganized Debtors;
• The equitization of up to $149 million of certain allowed DIP Claims held by DIP Backstop Lenders.
The Debtors have been in negotiations and plan to enter into an ABL Exit Facility. They anticipate filing additional disclosures of the final terms of the ABL Exit Facility in a Plan Supplement. The Disclosure Statement indicates that holders of allowed general unsecured claims will be impaired; it does not yet indicate the projected recoveries to general unsecured creditors.
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Bealls will merge its 600 Bealls Outlet and Burkes Outlet locations in 23 states under the new “bealls” moniker. The Company is dropping “outlet” saying it is dated and can lead to misconceptions about the quality of the merchandise. The conversion to “bealls” is possible following the Company’s 2020 acquisition of the intellectual property and other assets of Stage Stores, which gave them the right to use the Bealls name nationally; the deal included the Goody’s, Gordmans, Palais Royal, Peebles, and Bealls banners. Bealls also operates a 68-store chain in Florida, Bealls Department Stores, which is becoming “Bealls Florida” to align storefronts with its e-commerce business and emphasize its local roots and to “differentiate” and “distance” itself from national department stores. All stores are scheduled to be rebranded by the end of 2023.
Last month Casey’s General Stores acquired five DeliMart convenience stores in Iowa City, IA. The stores closed in late March and will reopen soon under the Casey’s banner. Casey’s expanded by 228 locations during FY22, 207 of which were acquisitions.
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Meijer will open a 159,000 square-foot store in Elkhart, IN on May 11, bringing its total store count to 42 in the state and 11th in Northern Indiana. The Company also operates a manufacturing facility in Middlebury, IN. Additionally, a Meijer Express gas station will open adjacent to the future store on April 13.
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Aldi opened a store in Troy, NY last week, and another New York store is slated to open in Williamsville this week. Aldi operates 123 stores in New York. Other stores opening this week include locations in Fort Washington, MD and Saint Charles, MO.
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The ODP Corporation completed the sale of its Boca Raton-based corporate headquarters for approximately $104 million. ODP’s headquarters will remain in Boca Raton, FL, as the Company will lease back a portion of the building from the buyer for a minimum of two years. Additional details of the transaction were not provided. The Company continues to contract its store base as demand for office supplies decreases and competition with Staples, Amazon, and mass merchandisers intensifies. Additionally, we note that if a recession takes hold, the related drop in employment could further reduce industry-wide demand for office supplies and negatively impact operations and cash flow.
Esco Ltd. (dba Shoe City) filed for Chapter 11 reorganization on March 31, and the Court authorized going-outof-business sales. The Company is based in Baltimore, MD and operates 39 stores throughout Maryland, Virginia, and Washington D.C. Gordon Brothers will sell retail leases and operate GOB sales at all locations, which average 2,000 to 9,900 square feet and include street front, regional mall, and strip center sites. Storewide price reductions of up to 30% off began April 6.
Hy-Vee opened its first health infusion clinic in its home city of West Des Moines, IA. The freestanding clinic is staffed by licensed physicians and nurse practitioners and features three private infusion rooms and five group infusion suites where treatments will be provided for rheumatology, gastroenterology, pulmonary, neurology, dermatology, oncology, and other chronic conditions. The Company has operated retail pharmacies for more than 50 years and currently has over 275 locations across eight Midwestern states. There are plans to open several more infusion clinics later this year, but no specifics have been announced.
Casper Sleep has agreed to sell its Canadian operations to Sleep Country for U.S.$20.6 million, which includes six stores. Sleep Country will receive a $4.5 million marketing transition fee from Casper over the next three years and get three-year warrants that could convert into a roughly 1% stake in Casper once exercised. Sleep Country also invested $20 million in five-year convertible notes that could convert into about 5% of Casper’s shares. Sleep Country operates 290 Company-owned stores and 20 warehouses across Canada. Casper opened its first physical Canadian store in 2018.
On April 5, Bed Bath & Beyond announced the launch of a new vendor consignment program with ReStore Capital, a Hilco Global company. Under this new, third-party agreement, ReStore Capital will purchase up to $120 million, on a revolving basis at any given time, of pre-arranged merchandise from the Company's key suppliers to supplement inventory levels already sold at Bed Bath & Beyond and buybuy BABY. Last week the Company revealed that its ABL revolver has been shrunk again to $300 million and availability was down to a scant $11.5 million. At the same time, Bed Bath & Beyond is relying on its latest At The Market offering in an attempt to raise another $300 million, but with the shares fading to as low as $0.30 per share with a market cap of $133 million for the entire Company, it is a long shot they will receive these proceeds. In order to continue listing the stock, the Company had previously called for a meeting to approve a reverse stock split of 1 for 5 or 1 for 10. The Company has now set a shareholder meeting date of May 9 and accelerated the split to 1 for 10 or 1 for 20 due to the plunging stock price. The banks also require minimum weekly equity proceed targets, including $40 million to be raised by April 11 and $111 million cumulative proceeds to be raised by April 25, the date the 10-K is due to be filed and potentially the last date they will qualify to continue to sell shares.
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PGA Tour Superstore opened a 50,000 square-foot store in Orland Park, IL over the weekend. Another store is planned for Chicago’s Lincoln Park neighborhood.
Kent Kwik Convenience Stores entered into an asset purchase agreement to acquire Hialeah, FL-based Tom Thumb Food Stores. The acquisition includes 14 Companyoperated Tom Thumb stores and three Subway franchise locations, all of which will remain under their existing banners. The deal will increase the Kent portfolio to 88 Company-owned and operated convenience stores, as well as 152 dealer sites throughout Texas, New Mexico, Oklahoma, Louisiana, Tennessee, North Carolina, South Carolina, and now Florida.
Fanatics acquired Epi, an Italian sports merchandise company that operates the official online and retail stores of several Italian football clubs, including AC Milan, Atalanta, Bologna, Fiorentina, Inter Milan, and the Italian Football Federation FIGC. Fanatics plans to rebrand EPI as Fanatics Italy. Fanatics has been expanding internationally in recent years with partnerships with Formula 1, International Olympic Committee, NFL, NBA, UEFA, Paris Saint-Germain, Manchester United, England Rugby, Tokyo Giants, The FA, and the AFL.
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