Openings, Closings, & Other Key Industry Highlights

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April 26, 2023

On Sunday, Bed Bath & Beyond filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of New Jersey. While the Debtors have commenced a liquidation sale, they plan “an orderly wind down of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets.”

On Monday, the Debtors filed first day motions seeking interim authorization to:

• Continue or initiate closing sales at the remaining 472 brick-and-mortar stores.

• Select a stalking horse bidder and conduct an auction for the sale of the Debtors’ assets.

• Use cash collateral, and enter into a $240 million DIP Facility.

Click here to request the latest Bed Bath & Beyond store closings.

Ingka Holding B.V., the owner of IKEA stores, plans to spend €2 billion ($2.20 billion) expanding in the U.S. over the next three years. This will be the Company’s biggest investment in a single country. IKEA is positioning itself to win American customers as other big-box retailers close stores and as consumers seek more affordable products amid financial concerns. Ingka plans to open eight new big-box IKEA stores and nine smaller stores, as well as upgrade existing stores in the U.S., which is IKEA's second-biggest market by sales after Germany. The planned expansion would increase the number of IKEA locations in the U.S. by around 33%, from 51 stores and two "plan and order points," which are smaller stores where customers can get advice and order furniture for delivery. Specific locations for the stores have not yet been decided. The new stores, including nine "plan and order points,” are in addition to already planned IKEA openings in downtown San Francisco, CA and in Arlington, VA.

In the Party City Holdco, DIP case, real estate advisor to the Debtors, A&G Real Estate Partner, announced plans to offer nine additional Party City leases in an auction on April 28. The bid deadline was April 24. A&G also announced the results of the April 14 auction at which Michaels Companies and Five Below together acquired five Party City leases. Michaels acquired four leases--in Corpus Christi and Dallas, TXs; Alexandria, LA; and Irondequoit, NY--and Five Below acquired a lease in Alameda, CA. The auction results are pending Bankruptcy Court approval. Cumulatively, the Debtors have identified approximately 42 stores which have been designated for closing.

Click here to request the latest Party City store closings. 

REI’s FY22 sales increased 3% to $3.85 billion, however, management did not provide any explanation for changes in operational or financial metrics. During the year, the Company opened five new stores, ending the year with 181 locations. One of the new stores was REI's first in the state of Nebraska.

In other news, the sports retailer plans to close its store in Portland, OR early next year, citing an increase in crime and theft. According to reports, the Company intends to close the Pearl District location ahead of its lease expiration in February 2024, and in an email to customers said it “had its highest number of break-ins and thefts in two decades, despite actions to provide extra security.”

Click here to request a sample list of future openings and closings. 

Amazon opened a one million square-foot fulfillment center in the Kansas City metro area dedicated to handling furniture, sporting equipment and other oversized products. The facility, located in Liberty, MO, is already operational, and employees work alongside automated technologies to pick, pack, and ship larger customer items that are typically longer than 96 inches or greater than 50 pounds such as mattresses, large televisions, and exercise equipment. In 2022, Amazon started moving from a national fulfillment network to a regionalized network model. This new fulfillment center is the first of its kind in the Kansas City region. 

Click here to request a sample list of future openings. 

Food Lion, a division of Ahold Delhaize, completed the remodel of 20 stores in the Carolinas, including six in the Charlotte, NC market. The stores were formerly Bi-Lo supermarkets that Food Lion purchased in 2021 and quickly converted; in all, Food Lion had purchased 62 Bi-Lo and Harveys Supermarket stores from Southeastern Grocers, located in North Carolina, South Carolina, and Georgia. The newly designed stores feature a fresh look, as well as grab-and-go meals and organic, gluten-free and plant-based products. Food Lion operates more than 1,100 stores across 10 states, including Delaware, Georgia, Kentucky, Maryland, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.

The family-owned convenience store chain Kum & Go has agreed to sell its gas stations and stores to the Salt Lake City, UT-based Maverik – Adventure’s First Stop. As part of the transaction, Maverik will acquire Solar Transport, a tank truck carrier and logistic provider also owned by Kum & Go’s parent company Krause Group. Financial terms were not disclosed. Kum & Go, headquartered in Des Moines, IA, has more than 400 stores across 13 Midwest states, and Maverik operates 400 locations across 12 western and Mid-western states, including Arizona, California, Colorado, Idaho, New Mexico, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington, and Wyoming, making it the largest independent fuel marketer in the Intermountain West.

The U.S. Supreme Court ruled that the Minnesota-based Mall of America, the largest shopping center in the country, can challenge a bargain lease it entered into more than 30 years ago with Sears Holdings Corp, which was subsequently sold to a new owner during the Company’s bankruptcy proceedings. The initial lease, signed in 1991 for a 100-year period, charged Sears $10/year for a three-story, 120,000 square-foot space. The unanimous decision overturns the lower court’s ruling and allows the Mall’s owner to proceed with its challenge to the lease in a lower court as it seeks the ability to charge more to rent the space that Sears had occupied.

Gabriel Brothers (dba Gabe's) acquired Old Time Pottery, the Tennessee-based home goods chain with 40 locations and an e-commerce site. The combined Company will operate 169 stores in 20 states, with the support of six distribution centers. Operationally, the companies will continue to operate as they do today. The Company said that as it integrates the two banners, it will work to develop unified payment terms and processes. Financial terms of the deal were not disclosed. We note that in FY21, Gabe's performed well, however, in October 2021, sponsors took out a large dividend. During 1H22, performance reportedly suffered and there were liquidity issues. Results saw improved trends in 2H22, which continued into 2023.

PetSmart and Uber Eats introduced a new partnership, allowing shoppers to place on-demand delivery orders from more than 1,600 PetSmart locations across the U.S., Canada, and Puerto Rico. The Company will offer everything from pet foods to accessories, habitats and healthcare products for dogs, cats, fish, and other pets on the Uber Eats platform. By partnering with Uber Eats, PetSmart said it is hoping to provide another convenient option for customers. 

GetGo Café + Market, the c-store segment of Giant Eagle, has sold four of its locations in Indianapolis, IN for $19.5 million. The purchaser is Darshan Darar, an independent retailer who owns about 20 c-store and fueling locations in the Indianapolis metro area. GetGo officially closed them on April 17, and the new management is expected to reopen them within the next week or so. As of now, the Company maintains, there are no plans to close any other GetGo locations in Indiana, where it now operates 58 stores — nine of which are in Indianapolis.

Click here to request a sample list of future openings or closings. 

Potbelly has prioritized refranchising in 2023, aiming to convert approximately 25% of its corporate locations during the next three years. Last month, the Company finalized a multi-unit development agreement along with its first refranchising deal in New York City, which included multi-unit development for 13 new shops over the next eight years, and the refranchise of eight shops. Overall, Potbelly is focused on a 10% annual new unit growth rate by 2024, with accelerated expansion in the years to follow. The Company has set a goal of reaching 2,000 total units in the next eight to 10 years, with at least an 85% franchise system. The chain currently has more than 400 locationsin over 30 states and Washington D.C., with nearly 50 franchised shops. 

Click here to request a sample list of more future store openings. 

Big Y plans to open a Big Y Express Fresh Market in downtown Springfield, MA this June. At 10,000 square feet, the store is about a fifth of the size of a standard Big Y supermarket, but it will offer more than 250 different fresh produce items, freshly baked breads and cakes, bean to cup coffee, prepared meals and sandwiches, freshly made sushi, natural and organic products, and everyday necessities. According to reports, because of the lack of grocery stores in Springfield, the Company received $1 million in federal COVID relief money from the city of Springfield to open this location. Big Y operates 84 locations throughout Massachusetts and Connecticut, including 70 supermarkets, Table & Vine Fine Wines and Liquors, and 13 Big Y Express gas and convenience locations.

In the Tuesday Morning Corporation, DIP case, the Debtors notified the Court that Hilco Merchant Resources, LLC was the successful bidder at the auction of the Company’s assets. Hilco, which provides liquidation services, has indicated that it does not presently intend to assume and assign any lease contracts. The asset purchase agreement contemplates a designation rights period commencing on the closing date and extending 60 days thereafter. A hearing to approve the sale is scheduled for April 27.

Click here to request the latest Tuesday Morning store closings. 

H-E-B has rebranded its convenience stores as 'H-E-B Fresh Bites,' opening its first banner unit in Leander, TX adjacent to an existing H-E-B location. The new c-store format will feature refrigerated cases in addition to normal convenience offerings such as soft drink fountains, beer and wine, and other snacks. At the same time, H-E-B is adding True Texas Tacos restaurants to some of its existing locations. With the opening of the Leander location, H-E-B has 12 convenience stores throughout Texas, and it will continue its plans to update the layout of the remaining convenience stores to the H-E-B Fresh Bites brand with many also including a True Texas Tacos. 

Click here to request a sample list of future store openings. 

Hy-Vee opened its new store in Eldridge, IA after a banner conversion. As reported previously, the Company acquired North Scott Foods, a family-owned, single-unit supermarket; it is the only grocery store in the community of about 6,700 people. The nearly 22,000 square-foot location features 1,000 specialty and 500 produce products as well as bakery, meat, seafood, deli, and beer/wine/spirits departments. Hy-Vee’s nearest location is approximately 10 miles away in Davenport, IA.

The San Francisco-based investment firm ValueAct Capital is pushing to oust Seven & i Holdings President Ryuichi Isaka, saying he is responsible for a "flawed strategy" and stating publicly for the first time that he is one of four directors it wants to replace at next month's annual meeting. ValueAct, which owns a 4.4% stake in the convenience store operator, is saying publicly that Isaka has acted in bad faith since becoming president in 2016 and is criticizing the board for having failed to conduct a succession review for Isaka. Earlier in the week, Seven & i said its board will oppose all director candidates nominated by ValueAct.

For 2023, Loblaw is planning to invest more than C$2 billion to develop its brick-and-mortar locations, including opening 38 new and/or relocated stores and converting or renovating nearly 600 others. The Company announced that it will be focusing on its core retail experience, expanding its presence in communities, modernizing its supply chain, and making food and healthcare more accessible. Other identified capital expenditures are the opening of new discount-format supermarkets, such as No Frills, in underserved communities, an increase in pharmacist-led health clinics, hundreds of carbon reduction initiatives across its business, and continued development of a modern distribution center in the Greater Toronto area.

The below retailers recently released their earnings reports. To request more information on these companies, or to discuss the financial performance with a retail industry expert, please click here.

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