Openings, Closings, & Other Key Industry Highlights

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August 10, 2022

 
 
 
 

Amazon has closed one of its Amazon Go stores in Seattle, WA because of concerns about the safety of its store employees, customers and third-party vendors due to escalating crime. The store will reopen if conditions improve. Employees at the closed store have been offered work at nearby Amazon Go locations.

Amazon Fresh recently opened its 40th store, in Thousand Oaks, CA. The 33,000 square-foot location is the 17th Amazon Fresh in the state. It comes just weeks after the launch of new Fresh stores in Paramus, NJ and Encino, CA. Click here to request a sample list of Amazon Fresh future store openings.

 
 

Signet Jewelers announced the acquisition of Blue Nile, an online retailer of engagement rings and fine jewelry, for $360 million in cash. Blue Nile generated revenue of more than $500 million in 2021. The acquisition is expected to close in 3Q23. While synergies are likely to start materializing as early as 4Q23, the acquisition will likely not be accretive until 4Q24, exclusive of transaction and integration-related charges, as well as anticipated impacts of purchase accounting adjustments. The acquisition accelerates Signet's efforts to expand its bridal offerings and grow its Accessible Luxury portfolio while extending its digital expansion in the jewelry category. Blue Nile brings a customer demographic that is younger, more affluent, and ethnically diverse. Upon closing, Blue Nile will be positioned at the top tier of Signet's Accessible Luxury banners along with Jared, James Allen and Diamonds Direct. Click here for more info.

In addition to a forward-looking analysis of specific retailers at risk by our team of industry experts, the report also includes a breakout of high yield retail bonds, upcoming debt maturities and future store closings.Click here to request a copy of this report.

 
 

Natural Grocers3Q22 sales increased 3% to $266.3 million, with 2.5% daily average comp growth comprised of a 2.7% increase in transaction size, partially offset by a 0.2% decrease in transaction count. Sales growth was also driven by retail price inflation, pandemic trends, marketing initiatives, promotional campaigns, and its loyalty program.

During 3Q22, the Company opened one new store in Colorado, ending the quarter with 162 stores in 20 states. Since the end of the quarter (June 30), an additional store opened in South Dakota. As of August 4, the Company has signed leases for another five new stores planned for FY22 and beyond.

For FY22, Natural Grocers expects comp growth of 2% – 3% and capex of $28 million – $35 million. It plans to open a total of 3 – 4 new stores and relocate/remodel two stores. Click hereto request a sample list of future openings.

 
 

Last week, Kroger opened its newest spoke location in Louisville, KY. The 50,000 square-foot facility will collaborate with the Customer Fulfillment Center (CFC) in Monroe, OH and will serve as a last-mile cross-dock location that expands Kroger Delivery’s ability to serve more customers in the Greater Louisville area.

Our report takes a closer look at the Company’s operational and competitive status, including market position, real estate and sales trends, and provides visual competitive analyses as well as key real estate metrics like store count, average sales per square foot, and the new Real Estate Intelligence analytics solution. Click hereto request a copy of the full report.

 
 

On August 9, 2022, MTY Food Group announced an agreement to acquire BBQ Holdings for $17.25 per share, representing a total transaction value of about $200 million, including all of BBQ’s net debt. BBQ operates and franchises several casual and fast casual dining chains including Famous Dave’s, Village Inn, Barrio Queen, and Granite City. It operates about 100 Company-owned restaurants and franchises another 200 plus locations at present. Current run-rate annual revenue is estimated at $685 million to $725 million and EBITDA is estimated at $25.5 million to $27.5 million. MTY Food Group is a major franchisor of over 80 quick-service and casual restaurant brands in the U.S. and Canada. These brands collectively have over 6,600 locations, 99% of which are franchised. The combined business is expected to have system sales of over C$4.80 billion, with pro forma net debt/EBITDA of about 2.4x at closing. The acquisition is expected to be fully paid from MTY’s cash on hand and revolver borrowings, and BBQ’s debt is expected to be repaid in full. The deal is expected to close in 4Q22, after which BBQ Holdings will be delisted and will operate as a subsidiary under MTY Food Group. Click here to request more info.

 
 

Party City’s 2Q22 sales were $527.4 million, a decrease of 1.5%, primarily driven by lower retail sales, partially offset by higher North American Wholesale sales. Total retail sales decreased 4.6%, primarily driven by lower sales of core product in everyday categories and the lapping of strong prior year retail results, as well as the current inflationary environment. Brand comparable sales decreased 5.6%, but increased 12.2% over pre-pandemic 2Q19. Net third-party wholesale sales increased 13.2%, principally due to higher sales to franchise customers as well as strong performance within the Canadian business. The Company is cautiously optimistic and encouraged by the early demand for Halloween. As such, it is planning for 130 – 150 Halloween City pop up stores this year, well above the 90 from last year, though still trails the 250 – 270 operated pre-pandemic. Plans for FY22 now include 85 to 100 new Next Generation stores, with a combination of new openings and remodels. The total number of corporate Party City stores was 756 as of June 30, 2022, compared to 749 in the prior year period.

 
 

Ollie’s Bargain Outlet recently opened its 450th store located in Overland Park, KS. The Company has been opening 50 to 55 locations annually, with an ultimate goal of at least 1,050 stores. Click hereto request a sample list of future openings.

 
 

The tide that lifted Big 5 is starting to recede, as demand for its products wanes. 2Q22 sales and comps both fell 22%; one new store was added during the year. EBITDA and EBITDA margin decreased 67% and 920 bps, respectively, due to promotional activity and the deleveraging impact of the lower sales base. The Company remained in a net cash position, although it fell YOY. Same-store sales are expected to decrease in the high-single-digit range during 3Q22 due to macroeconomic headwinds, while the 27% increase in inventory at the end of 2Q22 is likely to exert downward pressure on margins. During FY22, the Company expects to open three stores and close two, including one relocation.

 
 

CVS Health delivered mixed 2Q22 results, with sales up 11% but operating profit down almost 2% due to declining performance in the Retail segment, including continued pharmacy reimbursement pressure, decreased COVID-19 vaccinations, and increased investments in the segment’s operations. Retail segment sales grew just over 6%, with comps up 8%, including 9% front-end comps. The stronger comps were offset by store closures; the Company closed 198 of its 300 planned closures for the year.

During its earnings call with investors last week discussing 2Q22 results, CVS Health’s management discussed the possibility of pursuing mergers and acquisitions to grow its health care offerings. Recent reports indicate the Company is considering a bid to acquire Signify Health. Signify Health supplies technology that helps health plans and providers with in-home care. Signify went public in February 2021, raising over $500 million, but its stock price had subsequently fallen as much as 45% before it began recovering after reports surfaced earlier this month that it was considering strategic alternatives, including a sale. Click here to request a sample list of future openings and closings.

 
 

Planet Fitness' business expanded in 2Q22. Revenue increased 64% over the prior year period, driven by a 13.6% increase in system-wide same store sales as consumers returned to the gym. Franchise segment revenue was up 13%, corporate-owned club revenue was up 150%, and equipment segment revenue was up 70% over the prior year period. Overall, Company-provided EBITDA totaled $90 million, up 62% year-over-year; however, EBITDA margin decreased 40 bps. Membership also continued to climb; the Company added about 300,000 new members during the period, ending the quarter with 16.5 million members. During the year, the Company opened 154 new clubs, bringing the total count to 2,324. Click hereto request a sample list of future openings.

 
 

The Tile Shop’s 2Q22 sales increased 11.9% to $107.6 million, and comps were up 12% due to an increase in average ticket, driven by higher prices. Gross margin declined 310 bps to 66% due to vendor price increases related to higher costs of energy, labor, and other inflationary pressures, as well as higher international freight rates. These cost increases were partially offset by an increase in selling prices. Adjusted EBITDA rose 8.9% to $16.8 million. The Company ended the quarter with 143 stores, unchanged from the prior-year period. 

 
 

Sally Beauty’s 3Q22 sales fell 6%, with comps down 3.6%. The declines were mainly driven by inflationary pressures, supply chain challenges, tough prior-year comparisons, and 149 fewer stores than last year. By segment, Sally Beauty Supply (SBS) sales fell 8.5%, and Beauty Systems Group (BSG) sales declined 2.4%. 

 

Shake Shack plans to have 20 to 25 drive-thrus open by the end of 2023. The Company currently has six drive-thrus open, delivering on average >$80k in average weekly sales over the last four months. The brand, which reached 400 units last week, plans to continue to invest in new formats in the future, including drive-up, curbside and drive-thrus. Click here to request a sample list of future store openings.

 
 

Sprouts2Q sales advanced 5%, mainly due to 15 new stores and 2% comp growth. Comps gains continued to lag the field, up only 1% over two years and 10% over the same period from 2019 trailing inflation. That said, EBITDA grew 3.2% to $118.6 million, and EBITDA margin was flat for the 1H period at 8.4%. Based on operating trends, management tightened its full-year comp sales guidance to growth of 1% to 2% and sales growth of between 4% and 5%, reflecting contribution from the larger store base; the Company expects to open 15 to 17 new stores this year. Sprouts’ balance sheet remains very strong, with minimal debt and a net cash position. Click here to request a sample list of future store openings.

 
 

The ODP Corporation’s 2Q22 sales fell modestly due to fewer retail stores in service as well as challenges related to sourcing and supply chain irregularities. Retail Division sales were down 11%, due to the closure of 71 stores during the year; management did not provide comps.

 
 

Lidl US plans to open its first store in the NYC borough of Brooklyn within a new residential and retail complex in Park Slope. The Company recently signed a 25,000 square-foot lease for a former Key Food site that closed last year. It is expected to open in 2024. Last month, Lidl opened its first store in Baltimore and is working on a 29,000 square-foot store in Washington, D.C., expected to open in 3Q22. Click here to request a sample list of future store openings.

 
 

On August 12, QuikTrip will open a gas-free store in Tulsa, OK, focused on food and household goods. The c-store, which is located inside the BOK Tower in downtown Tulsa, will be QuikTrip’s second gas-free site centered around food. The first opened in Atlanta in 2016. The new concept shows a growing trend of c-stores focusing more on selling premium prepared foods and household merchandise. Click here to request a sample list of future store openings.

 
 

Giant Eagle announced plans to open a Market District store as part of a new mixed-use redevelopment in Shadyside, PA, replacing a previous Giant Eagle that closed last month. The Company has opted to brand the new store as Market District in relatively close proximity to another Market District, which is a larger store and has a comparatively wealthy clientele. Giant Eagle has expanded to 17 Market District stores throughout its territory.

 
 

The Container Store Group’s 1Q22 sales increased 7.1% to $262.6 million. Retail sales were $246.8 million, up 7.9%, while Elfa third-party sales were $15.9 million, down 4.4%. Comps were up 5.1%, with Custom Closets up 14.7% and general merchandise categories up 0.8%. Container Store operated 94 stores at quarter end, with no openings during the quarter. The Company lowered its FY22 EPS guidance; it currently expects to open two stores during FY22, including one in Colorado Springs, CO during 2Q22 and one in Salem, NH in late 2022. 

 
 

Dine Brands’ 2Q22 revenues increased 1.8% to $237.8 million, due to positive comp growth at both its Applebee’s and IHOP banners. Applebee’s same-restaurant sales increased 1.8%, with off-premise sales accounting for 25.6% of sales, representing average weekly sales of approximately $13,900. IHOP’s same-restaurant sales rose 3.6%, with off-premise sales accounting for 21.3% of sales mix, representing average weekly sales of approximately $8,300.

During 2Q22, Applebee’s and IHOP franchisees opened 14 new restaurants and closed 8 restaurants.

The Company reiterated its FY22 guidance. Adjusted EBITDA is expected to range between $235 million and $250 million, and capex is expected to be $33 million – $38 million, reflecting incremental investments in the business to support sustainable growth. It continues to expect domestic development activity by Applebee’s franchisees to result in between 5 and 15 net fewer restaurants and activity by IHOP franchisees and area licensees to result in net new openings of between 50 and 65 restaurants.

 
 

Cinemark Holdingstotal revenues for 2Q22 ended June 30 increased 152.6% to $744.1 million, with prior-year results impacted by theater closures and limited new film content. 2Q22 Adjusted EBITDA was $138.3 million compared with a loss of $11.8 million in 2Q21. U.S. total revenues for 2Q22 (81% of total revenues) were up 123.1% to $600.8 million; U.S. theater admissions rose 120%, while U.S. concessions were up 136%. U.S. average ticket price for the quarter eased to $9.11 from $9.33 last year, though concessions per patron rose to $6.90 from $6.59 during 2Q21. As of June 30, the Company had commitments to open two new theatres with 32 screens (one theatre and 21 screens in the U.S.) during the remainder of 2022 and seven new theatres and 55 screens (three and 34 in the U.S.) subsequent to 2022. Click here to request a sample list of future store openings.

 

The Buckle’s July 2022 sales increased 4.2% to $97.7 million, and comps were up 1.8%. For the 13-week period ended July 30, sales were up 2.3% to $302 million, and comps were up 1.6%. For the 26-week period, sales rose 2.8% to $611 million, and comps increased 2.6%. Buckle operates 442 stores in 42 states, including one new store opened last week in Stephenville, TX. According to our Retail Openings & Closings tracker (see map below), future openings include Des Moines, IA (November 2022); Birmingham, AL (late 2022); and Daytona Beach, FL (TBD). Click here to request a sample list of future store openings.

 
 

Costco reported July sales this week, with revenues up 10.8% to $16.85 billion. For the 48-week period, sales were up 16.4%. Total Company comps (excluding fuel) gained 7%. Canada led the way, up 11.5%, followed by Other International, up 9.4%. The U.S. lagged the field with a 5.8% comp improvement. E-commerce growth continues, but at a slightly slower pace than previous months, improving 11.5%. Comps in the food/sundries category were up low double-digits, led by frozen foods. Fresh food and general merchandise were each up low to mid-single digits. The Company opened one new warehouse, finishing the month with 834. Click here to request a sample list of future store openings.

Yum! Brands’ 2Q22 sales rose 2.1% to $1.64 billion. Global same-store sales were up 1%, negatively impacted by COVID lockdowns in China. Excluding China, it reported same-store sales growth of 6%. KFC’s global same-store sales declined 1% (China is its largest market, accounting for more than 25% of its sales). In the U.S., its second-largest market, same-store sales fell 7%, as the Company said it was facing tough comparisons with the year-ago period when it released a revamped chicken sandwich. Pizza Hut also saw falling sales in the U.S. and China. Its global same-store sales declined 3%, as U.S. demand for its pizza softened, and sales in China plummeted 14%, excluding foreign currency changes.

The Company said it is in the “advanced stages” of selling off its KFC business in Russia. After that process is completed, Yum will have exited Russia entirely. The market accounted for 2% of system-wide sales in 2021. Yum’s total restaurant count fell by 702 during the quarter. The Company eliminated 1,165 Russian locations from its system, offsetting the 463 net new units it opened.

 
 

Floor & Décor’s 2Q22 sales increased 26.7% to $1.09 billion, and comps were up 9.2%. Adjusted EBITDA rose 9.7% to $150.3 million. The Company opened nine new stores and closed one underperforming location, ending the quarter with 174 warehouse stores and five design studios. Looking to 3Q22, the Company plans to open eight warehouse stores as part of its FY22 goal to open 32 new stores. See the adjacent chart for updated guidance for FY22. 

In other news, Floor & Décor promoted Trevor Lang, EVP and CFO, to the role of president. The Company will conduct a search for a new CFO, which will include internal and external candidates. Lang’s promotion will be effective upon the appointment of a new CFO. Click here to request a sample list of future store openings.

 
 

Chuy’s 2Q22 revenue increased 2.6% to $110.9 million, primarily driven by $2.1 million of incremental revenue from an additional 21 operating weeks provided by new restaurants opened during and subsequent to 2Q21. Comps increased 1.7% compared FY21, driven by a 3.4% increase in average check and offset by a 1.7% decrease in average weekly customer, and increased 0.6% compared to FY19. During 2Q22, Chuy’s opened one new restaurant in Midland, TX.

The Company updated its guidance for FY22 and now anticipates four new restaurant openings versus a previous range of 4 – 6 new restaurants, and capex of $30 million – $33 million versus a previous range of $22 – $33 million. Click here to request a sample list of future store openings.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

For more information on AggData contact Josh Suffin@ (800) 789-0123 x172