Walgreens Boots Alliance/Rite Aid
A published report from last week indicated that Walgreens Boots Alliance (WBA) set a deadline of three months for the U.S. FTC to either block or allow its proposed merger with Rite Aid through a declaration of “certified compliance” or a notification that it has supplied all the information the regulators need to make a decision. In mid-March, it was reported that WBA was set to make a new proposal to the FTC in order to gain approval of the merger. WBA is said to be close to reaching an agreement to sell additional assets to Fred’s Inc., which has already agreed to acquire 865 Rite Aid stores for $950.0 million and to expand that offer to up to 1,200 stores. WBA may be betting on an improving regulatory environment, as President Donald Trump is reportedly considering Republican Utah attorney general Sean Reyes to lead the FTC after his administration’s January firing of Democrat Edith Ramirez.
On April 3, WBA and PBM Prime Therapeutics LLC announced the closing of their transaction to form a combined central specialty pharmacy and mail services company, as part of a strategic alliance announced last August. The Company, AllianceRx Walgreens Prime, is headquartered in Orlando, FL. The retail pharmacy network agreement will give Prime’s health plan and employer clients, with 22 million members, access to the preferred Walgreens pharmacy network. AllianceRx Walgreens Prime will manage several consolidated mail service and central specialty pharmacy operations. The companies previously began the retail network component of the agreement, which took effect January 1. AllianceRx Walgreens Prime will be consolidated into WBA, and the full integration is expected to be completed by early calendar 2018. Prime is the nation’s fourth largest PBM and is owned by 14 leading Blue Cross and Blue Shield health plans.
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Tops Holding II Corporation
Tops Holding II Corporation announced results for its fourth quarter and fiscal year ended December 31, 2016. Sales excluding fuel were $553.5 million in the fourth quarter, down 2.9%, or $16.7 million, from a year ago. Excluding the $44.9 million of sales related to the additional week in the fiscal 2015 fourth quarter, inside sales increased $28.3 million for the quarter, or 5.4%, aided by the addition of six stores in August. Same store sales, calculated on a comparable 12-week period, decreased 1.9% due to food cost deflation in certain categories, including meat and dairy, as well as lower traffic levels. In August 2016, in connection with the merger of Ahold and Delhaize, the Company acquired four Stop & Shop and two Hannaford Bros. supermarkets in eastern New York and Massachusetts. During its fourth quarter conference call, the Company noted that these stores got off to a slow start, as it focused on integrating and investing in the stores, introducing merchandising programs and identifying optimal product mixes. Management said it expects to see improved profitability for the acquired stores in 2017, as remodeling efforts are completed and merchandising programs are fully implemented; Tops is looking to add one new location in 2017. Management also noted that it is analyzing and actively pursuing opportunities to address the $85.0 million principal amount of notes coming due in June 2018 and to lower overall leverage in the near term. The Company’s $150.0 million revolving credit facility had $39.5 million available (after giving effect to the borrowing base calculation and $22.8 million in outstanding letters of credit). On December 30, 2016, the maturity date of the revolver was extended to 2021.
Click here for Tops Friendly Markets' full store list.
Northgate Gonzalez Market
Last week, Northgate Gonzalez Market opened a new 50,000 square-foot flagship store in La Habra, CA, which replaces an older 20,000 square-foot store that closed last Tuesday. The store offers expanded prepared food offerings, including hot and cold food bars, and more convenient checkout services. The Company operates about 40 stores in Southern California. There are 12 competing food retail stores within three miles of the new store, including two each of Smart & Final, Sprouts, and Vons; and an Albertsons, ALDI, Grocery Outlet, Ralphs, Stater Bros. and Trader Joes.
Meanwhile, Northgate CEO Tom Herman recently said that the Company intends to undertake “major remodels and expansions” this year. While he said he is not sure if they will have any new store openings this year, it will perform a number of major remodels, including two stores in the San Diego market. The Company’s current strategy is to remodel or expand its older stores that cannot accommodate all of its departments and are not doing enough volume.
Click here for Northgate Gonzalez Market's full store list.
bebe Stores, Inc.
bebe stores, inc. is reportedly attempting to close all 134 of its brick-and-mortar retail locations and focus exclusively on online sales. bebe retained B. Riley & Co. as its financial advisor to explore strategic alternatives and also engaged a real estate advisor to assist with options related to its lease holdings. It should be noted that the lease cancellation costs may be prohibitively expensive, and may require the Company to explore other alternatives to get out of its lease obligations.
Click here for bebe's full store list.
Publix
Publix Super Markets plans to “reignite” its GreenWise store concept, which focuses on organic ingredients and products. GreenWise is also the name of a Publix brand launched in 2003 that includes organic products. The first newly redesigned GreenWise will be in Tallahassee, FL and is expected to debut in late 2018. Publix plans to share additional details related to the new GreenWise format closer to the store opening. It currently has three GreenWise Market stores located in Palm Beach Gardens, Boca Raton and Tampa, FL and is aggressively looking for additional GreenWise locations across its operating areas.
Click here for Publix's full store list.
ALDI
ALDI will open its second store in Pearland, TX in May. Another nearby store is set to open in the Fulshear area this summer. The Company currently operates 32 Houston-area locations, since entering the market in 2013. According to Nielsen, as of January 2017, H.E. Butt is the Houston market food retail leader, with 71 stores and 26% market share, followed by Walmart with 77 stores and 23% market share and Kroger with 103 stores and 22% market share.
Click here for ALDI's full store list.
Supervalu
Supervalu is consolidating operations and merchandising for its Farm Fresh and Shoppers banners. Consequently, it will eliminate 21 of 44 merchandising and operations jobs at Farm Fresh’s Virginia Beach, VA headquarters. Meanwhile, buying decisions for Farm Fresh and Shoppers stores will be made at Shoppers’ Bowie, MD headquarters, where the Company will hire an additional 14 employees. Supervalu noted no plans to rebrand or close its 40 Farm Fresh or 52 Shoppers stores. Supervalu’s Retail segment has struggled, with comps falling to -5.7% for the quarter, while EBITDA fell about 35%; the 40-week year-to-date figures were nearly identical.
Click here for Supervalu's full store list.
Stage Stores
On March 30, Stage Stores’ subsidiary prevailed in its bid to acquire certain assets of Gordmans Stores, DIP through a bankruptcy auction. Under the terms of the transaction, the subsidiary of Stage Stores will acquire a minimum of 50 Gordmans store leases, with rights to assume leases for an additional seven stores and a distribution center. In addition, it will acquire all of Gordmans’ inventory at these locations, furniture, fixtures, equipment and other assets, as well as Gordmans’ trademarks and other intellectual property. Stage intends to fund the transaction and related investments from existing cash and availability under its credit facility. The transaction is expected to close during the first quarter of fiscal 2017. Substantially all of the assets at Gordmans’ remaining 48 stores and other facilities are to be liquidated by Tiger Capital Group, LLC and Great American Group, LLC. Additional debt to fund the acquisition may lead to increased leverage at Stage Stores. The Company has a history of negative comps, and its ratio of debt/TTM EBITDA was 3.01x at the end of fiscal 2016. Additionally, total liquidity at year-end was just $298.4 million, consisting of borrowing availability of $284.6 million and cash of $13.8 million.
Click here for Stage Stores' full store list.
Lowe's Foods
Lowe's Foods will close its Newland, NC store by April 29. According to the Company, the store’s closure, along with four other stores slated for closure in Pilot Mountain, Murfreesboro, Sparta and Louisburg, are part of continued adjustments to their total store portfolio as part of a broader growth strategy for investing in new stores and continuing major store remodels. This follows September 2016 closures in Shallote and North Wilkesboro, NC and several others in recent years, including three each in 2015 and 2014. The Company currently operates about 75 Lowe’s Food Stores in North Carolina, South Carolina and Virginia and about 15 Just$ave Foods in North Carolina.
Please click here for Lowes Foods' full store list
Whole Foods
Last week, Whole Foods released a statement saying that, “as part of a careful evaluation of our growth strategy, Whole Foods Market has decided to delay indefinitely the opening of our West Seattle store.” The news comes as the Company is cutting costs, saying last month that it would be closing nine stores by April and shuttering its last three commissaries that make prepared foods for its stores. It also has terminated several leases in development.
Click here for Whole Foods' full store list.
Starbucks
Starbucks will open the first of 1,000 planned high-end Reserve stores in the lobby of its headquarters in Seattle, WA. The existing store in the lobby will close April 7 during broader headquarters renovations and the new store will open this fall. The Reserve stores will serve Starbucks’ premium coffees, along with food from artisanal bakery Princi. In July 2016, Starbucks announced a financial investment and global licensing deal with Princi, based in Milan, Italy.
As part of the headquarters renovations, Starbucks will also open its first location at which customers can only order via Starbucks’ mobile ordering system. It will be on the eighth floor of its headquarters building, across from the existing Starbucks store there. The existing store is one of the Company’s top three mobile-ordering sites in the U.S. The concept is designed to see if Starbucks can find a way to address concerns that mobile ordering has become so successful in some locations that it creates congestion in stores where people also want to walk in and place their orders in more traditional fashion.
Click here for Starbucks' full store list.
Conn's
Conn’s reported fourth quarter sales decreased 5.3% to $432.8 million. Retail sales decreased 5.5% to $356.2 million on an 8.9% comp decline, partially offset by 10 new stores opened in the past year. By segment, comps were down 9.2% in the furniture and mattress segment, 9.7% in the home appliance segment, 6.4% in the consumer electronics segment, and 18.4% in the home office segment. Credit revenues fell 4.1% to $76.6 million due to lower credit insurance commissions as a result of higher claim volumes in Louisiana after the floods last year. The Company recorded a net loss of $74,000, compared to a profit of $1.1 million; excluding credits from legal and professional fees associated with securities-related litigation, an adjustment to the Company’s sales tax audit reserve, executive management transition costs, and certain non-recurring discrete tax items, Conn’s would have recorded a profit of $1.5 million. CEO Norm Miller said, “Fiscal 2017 was a transitional year, focused on creating a strong credit platform to improve Conn’s near-term results and support the pursuit of the Company’s long-term growth strategy. While much of our focus during fiscal 2017 was on turning around the credit operation, Conn’s retail business performed well.” Looking to fiscal 2018, the Company expects to open three new stores, two of which already opened in February.
Click here for Conn's full store list.
Dollarama
Dollarama reported fourth quarter sales growth of 11.5% to $854.5 million, driven by organic sales growth including comp growth of 5.8% and the addition of 65 net new stores during fiscal 2017 (26 opened during 4Q). Comp growth consisted of a 7.8% increase in average transaction size and a 1.9% decrease in the number of transactions. About 64.3% of fourth quarter sales were from products priced higher than $1.25, compared to 59.4% last year. Net earnings jumped 17% to $146.1 million, mainly a result of sales growth and lower SG&A margin. For fiscal 2017, sales rose 11.8% to $2.96 billion, comps increased 5.8%, and net income rose 15.7% to $445.6 million.
The Company completed construction of its new 500,000 square foot warehouse in Montreal, Québec. According to the Company, the new warehouse has added approximately 40% more capacity and will accommodate the Company’s future growth as it continues to expand its store network.
Looking ahead at fiscal 2018, Dollarama expects to open 60 – 70 net new stores. Capex is expected to be $90.0 million – $100.0 million, down from the $166.2 million it spent in fiscal 2016.
Click here for Dollarama's full store list.
Future Retail Store Closings
AggData monitors upcoming retail store closings throughout the day and maintains an active database of store locations and anticipated closing dates. Here is a sample of recently announced store closings.
Please contact AggData to request a full future store closing list.
Bob Evans
The TA Restaurant Group, a division of TravelCenters of America LLC, recently held the grand opening of its first Bob Evans restaurant. The 4,500 square-foot restaurant, which offers seating for 116 customers, is inside the TA travel center located at Hebron, Ohio.
Click here for Bob Evans' full store list.
London Drugs
London Drugs officially reopened its newly renovated Grande Prairie, Canada store last Friday. The redesigned 33,000 square-foot store includes a larger pharmacy consultation area with private rooms as well as an expanded beauty section. There is also a “classroom-style learning lab” where staff will offer in-store educational workshops on health, wellness, technology and sustainability.
Click here for London Drugs' full store list.
Dollar General
Dollar General announced plans to buy all 323 discount stores in 36 states from Dollar Express. The chain was formerly under Family Dollar before being bought in 2015 by private equity firm Sycamore Partners. The stores were initially sold by Family Dollar parent Dollar Tree as part of a foray into the new Dollar Express concept. All of the stores purchased will be rebranded as Dollar General locations. Terms of the deal were not disclosed.
Click here for Dollar General's full store list.
84 Lumber
On April 4, 84 Lumber plans to open a 36,000 square-foot store in Riverhead, NY, which will offer specialty departments including a 6,500 square-foot showroom for its kitchen and bath design studio, a custom millwork shop, and a reclaimed wood display area. The store will be the Company’s first to open in 2017, followed by openings in Holbrook (South Boston), MA; San Antonio, TX; Tampa, FL; and Durham, NC. 84 Lumber operates 245 stores in the U.S., including 24 in New York. The Company’s only existing Long Island store is located in Patchogue, NY. Sherwin-Williams, Lumber Liquidators, Lowe’s, Home Depot, Agway and Fastenal each operate one location within one mile of each other in Riverhead.
Click here for 84 Lumber's full store list.
J. Jill
J. Jill’s fourth quarter sales increased 14.8% to $166.9 million, and comps were up 10.8%. Profit rose 41.1% to $2.0 million. CEO Paula Bennett stated, “We are very pleased with our fourth quarter performance, which helped drive our strong fiscal 2016 results. We have now delivered positive total Company comparable sales in 18 of the last 20 quarters, and year-over-year earnings growth for 20 consecutive quarters. Our 10.8% total Company comparable sales growth for the fourth quarter of fiscal 2016 demonstrates our ability to delight our customers with the product assortment and omni-channel shopping experience that builds loyalty for our brand. With our proven formula of data-driven decision making, we believe that we have the right strategies in place to grow profitably, and we plan to continue the momentum that we achieved in 2016 into 2017 and beyond.” The Company opened 14 net new stores during fiscal 2016 and ended the year with 275 stores. J. Jill launched its IPO in February with 11.67 million shares priced at $12.68. Previously, private equity firm TowerBrook Capital Partners LP acquired J. Jill in 2015 from Golden Gate Capital and Arcapita. While financial details of the deal were not disclosed, published reports valued the transaction at about $400.0 million.
Click here for J. Jill's full store list.
Ollie's Bargain Outlet
Ollie’s fourth quarter sales increased 16.4% to $283.4 million, driven by a 2% increase in comps and 31 net new store openings over the past year. According to the Company, the increase in comps was broad based, with the majority of its 21 departments generating positive comps. The 31 net new stores opened during fiscal 2016, including two in the fourth quarter, brought the Company’s total store count to 243. Net income increased 52% to $24.4 million. For fiscal 2016, sales rose 16.8% to $890.3 million, comps increased 3.2%, and net income jumped 66.8% to $59.8 million.
Looking ahead at fiscal 2017, the Company expects sales of $1.025 billion – $1.035 million, comp growth of 1% – 2%, net income of $73.0 million – $74.5 million, and capex of $18.0 million – $20.0 million. It expects to open 33 – 35 new stores, with no closures planned.
Click here for Ollie's Bargain Outlet's full store list.
Reitmans (Canada) Limited
Reitmans (Canada) Limited reported fourth quarter sales increased 2.6% to $248.5 million, and comps were up 7.9%, despite a net reduction of 90 stores. The Company also recorded a profit of $328,000, compared to a loss of $16.5 million in the prior year; the prior-year period included an impairment of goodwill of $4.2 million related to the Thyme Maternity banner, while the current period included reduced operating expenses of $11.7 million. The Company operates 677 stores consisting of 288 Reitmans, 127 Pennington, 96 Addition Elle, 85 RW & Co., 62 Thyme Maternity and 19 Hyba.
Click here for Reitmans Limited's full store list.
AMC Entertainment Holdings
AMC Entertainment Holdings completed its acquisition of Stockholm-based Nordic Cinema Group Holding AB, the largest theatre operator in the Nordic and Baltic countries. AMC completed the purchase in an all-cash transaction of SEK 5.76 billion (US$651.9 million), and the Company also repaid Nordic’s debt of SEK 1.27 billion (US$144.3 million) and debt of €156.0 million (US$168.2 million). The newly combined Company now operates more than 1,000 theatres and 11,000 screens across the globe in 15 countries. Nordic will operate as a subsidiary of Odeon Cinemas Group, which AMC acquired in November 2016. Jan Bernhardsson, former president and CEO of Nordic, was promoted to COO of Odeon Cinemas Group and EVP of AMC Europe.
Click here for AMC Entertainment's full store list.
Cineplex
Cineplex completed its acquisition of Dandy Amusements International, which is now part of the Company’s amusement solutions business, Player One Amusement Group. Dandy operates within the coin-operated, route operations amusement equipment segment, predominantly in the western U.S., including California, Arizona, Washington and Texas. Financial terms were not disclosed. With the acquisition of Dandy, Player One now employs over 550 people in 25 offices throughout Canada and the U.S.
Click here for Cineplex's full store list.
