July 14, 2021
Save-A-Lot announced last week that it is selling 10 Company-operated stores across the New Orleans, LA metro area to Louisiana grocer BrandonTrosclair.The move is part of Save-A-Lot’s effort to convert corporate-ownedstores to local operations. The stores will immediately undergo significant refreshments and a reorganization of products, with near-term remodeling plans.
Meanwhile, Save-A-Lot announced on July 8 its plan to accelerate investments in its stores as part of ongoing modernization efforts. The Company said this latest rollout builds on the success of recent market-wide upgrades in St. Louis, MO; Denver, CO; and Tampa, FL. As part of the new initiative, it is working with its independent license owners to remodel a third of its fleet in 2021, with plans to remodel all 1,000 stores by 2024. Each remodeled store will feature a contemporary look and will offer a strong assortment of regional products. The Company also noted that its work to revitalize the brand also includes expanding its digital marketing efforts through the launch of the ‘99 Days of Summer’ campaign, which will take place between May 31 and September 6. The marketing program will push value-saving digital offers to customers, with daily deals, weekly digital coupons, and summer sweepstakes prizes.
L Brands’ board approved the previously announced separation of its Victoria’s Secret unit (now Victoria’s Secret & Co.) into an independent, publicly traded company. In addition, the board approved a name change from L Brands, Inc. to Bath & Body Works, Inc. and a related change of the ticker symbol to “BBWI” from “LB.” The stated purpose of this separation was to unlock shareholder value for each Company, with Bath & Body Works continuing its growth and Victoria’s Secret igniting a business turnaround. The separation will be achieved through the distribution of 100% of Victoria’s Secret shares to holders of L Brands common stock. The distribution of Victoria’s Secret shares is expected to be completed after the market close on August 2. Click here to request more information.
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Costco reported June sales of just under $19 billion, up 17% from the same period last year. Companywide comps were up 8%, led by Canada, which increased almost 9%. E-commerce grew 18%. June sales had one fewer shopping day compared to last year due to the calendar shift of Memorial Day, which impacted sales by about 2%. The Company noted strong U.S. sales in Texas and the Southeast in Mexico, and Korea and Taiwan internationally. Fresh foods, seasonal, and sporting goods led the product categories. Costco finished the month with 810 clubs, up from 788 last year. Click here to request a list of future store openings.
On Sunday evening in the U.S. and Monday morning for much of the rest of the world, Amazon’s services were disrupted for nearly two hours and at the peak of the disruption, more than 38,000 user reports indicated issues with Amazon’s online stores. The online operations have since returned to normal.
Meanwhile, on Friday a U.S. judge dismissed Amazon’s legal challenge to the Defense Department’s 2019 decision to award a $10 billion JEDI cloud-computing project to rival Microsoft after the Pentagon canceled the contract. Amazon had accused then-President Trump, alleging that the former president exerted improper pressure on military officials to steer the contract away from Amazon. The Pentagon said on Tuesday it expected the new multi-billion dollar contract would be split between Amazon and Microsoft.
In other news, Amazon appointed Tony Hoggett, a veteran of British supermarket chain Tesco, as SVP of physical stores, effective in January 2022. Mr. Hoggett has been with Tesco for over 31 years and is currently chief strategy and innovation director.
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PriceSmart announced a strong 3Q21 performance, with sales and comps up 12% and 9%, respectively. The sales increase was led by Central America, up 18%, and Colombia expanding 22%, offset by the Caribbean which was down 3%. Currency fluctuations negatively affected sales by 1.6%. Comps were driven by a 19% growth in transactions. The Company added two warehouse clubs, finishing the quarter with 47. PriceSmart remains on track with its three planned openings in Guatemala City and Bucaramanga, Colombia, set to open this fall, and Portmore, Jamaica, set to open in spring 2022.
7-Eleven is expanding into the Myrtle Beach, SC market with three new stores and nearly 20 locations acquired through its recent purchase of Speedway. As part of the acquisition, 7-Eleven picked up about 3,800 stores located across 36 states for $21 billion. Click here to request a list of future store openings.
CKE Restaurants Holdings announced July 7 a master franchise agreement with CJ’s QSR (Franchise) Group Pty. Ltd. to expand Carl’s Jr.’s presence throughout Australia. Since introducing Carl’s Jr. to Australia in 2016, the brand has grown to nearly 30 restaurants in the country. Plans are in place to grow the Carl’s Jr. footprint in Australia with an additional 27 restaurants in the coming year. The master franchise agreement will further accelerate CKE Restaurants’ growth as it builds towards a goal to open 200 restaurants over the next 10 years.
Nordstrom acquired a minority interest in four apparel brands, Topshop, Topman, Miss Selfridge, and HIIT, which are owned by U.K. online retailer Asos. Financial terms of the deal were not disclosed. Under the deal, Asos will continue to have operational and creative control of the brands, with both companies collaborating together on the project. Asos, which does not have a brick-and-mortar presence, sells more than 850 brands as well as its own label. Nordstrom is Asos’ first retail partner, though it has been the exclusive distributor for Topshop and Topman in the U.S. since 2012. Beginning this fall, customers who place orders on Asos.com will be able to pick them up at Nordstrom and Nordstrom Rack stores. Nordstrom will have exclusive multi-channel retail rights for Topshop and Topman in North America, and will own a minority stake globally. It will be the only brick-and-mortar presence for these brands worldwide. Asos acquired the four brands from Arcadia Group in February 2021. Click here to request a list of future store openings.
Aritzia had a challenging 4Q21 due to government pandemic mandates, which forced the closure of 39 locations during the majority of the period, mainly in Ontario and Quebec. Despite the Canadian store closures and reduced operating hours, 4Q21 sales fell just 3% to C$268 million, due to an 81% y-o-y increase in the e-commerce business, and five new boutiques added since the same period last year. Sales also benefited from a 9% sales increase in the 33 U.S. boutiques.
Despite lower sales, gross margin widened 120 bps due to significantly lower markdowns during the Fall/Winter season, partially offset by higher warehousing and distribution costs related to e-commerce growth. Overall, EBITDA contracted 19% to C$38 million, 290 bps on a margin basis. The Company’s credit metrics are strong, and as of February 28, Aritzia had a C$74 million net cash position and full revolver availability.
Our Hot Market Report takes a closer look at the Washington D.C. real estate landscape, and provides visual competitive analyses as well as key real estate metrics such as future openings, store count, market share, digital insights, and demographics. Click here to request a copy of the full report.
Laderach, a family-owned Switzerland-based chocolatier, signed lease agreements with mall operator Simon to open 15 stores nationwide in August and September. Locations include California (4), New York (4), Florida (3), Texas (2), Massachusetts (1), and Virginia (1). This announcement comes after the Company signed an asset purchase agreement in February to take over the leases of 34 Godiva locations across the U.S. These future openings are part of Laderach’s efforts to expand its U.S. footprint to keep up with high e-commerce demand. The Company began its U.S. expansion in November 2019, opening locations in New York City, East Rutherford, NJ, and Washington D.C., followed by its second New York City store in December 2020; in June 2021, two new stores were opened in South Florida.
About 7,000 UFCW members working at 98 Kroger’s Food 4 Less/FoodsCo supermarkets in Southern and Central California have overwhelmingly voted to ratify a new contract, following six months of negotiations. The contract, which expires on June 8, 2024, includes wage increases of up to $1.65 per hour over three years as well as an agreement to match any larger increases won by workers at sister banner Ralphs in their upcoming contract renewal.
Meanwhile, Kroger’s Atlanta division and members of UFCW Local 1996, which covers 22,000 associates at 170 stores in Greater Atlanta and Savannah, GA, ratified new labor agreements on July 7 and July 8. The Kroger Atlanta division is investing more than $300 million in wage increases across four years in these agreements. Click here to request a list of future store openings and closings.
Topgolf Entertainment entered into a developer agreement with TG Latam to open venues in South America, starting with Bogota, Columbia. The multi-level entertainment venue in Bogota will feature 102 climate-controlled and outdoor hitting bays. Currently, Topgolf operates 70 venues worldwide, including 64 in the U.S., three in the U.K., and one each in Australia, Mexico, and the U.A.E. Plans are also underway to open new franchised venues across Asia and Central Europe, with locations currently in development in Oberhausen, Germany and Bangkok, Thailand. Click here to request a list of future store openings.
This week, Coborn’s will open a remodeled store in Park Rapids, MN. It will offer enhanced services, an expanded assortment of products, an enlarged perimeter of fresh departments, and updated décor. Coborn’s has updated 19 of its 28 locations to the next-generation format it first introduced in 2016. The Company is also building a new store in Buffalo, MN that will open later in 2021.
Carrols Restaurant Group announced that it recently acquired 19 Burger King restaurants in Indiana and Michigan. The restaurants were acquired in two separate transactions and were the Company’s first multi-restaurant acquisitions in more than two years.
Authentic Brands Group filed an IPO prospectus to list its shares on the NYSE. Leonard Green & Partners LP, General Atlantic LLC, Simon Property Group Inc., and Lion Capital LLP are listed as its largest shareholders, according to the SEC filing. The Company was founded in 2010 and has grown to a portfolio of more than 30 apparel, celebrity, and sports brands through several acquisitions. Brands include Forever21, Barneys New York, Nine West, Nautica, Brooks Brothers, and Lucky. FY20 sales were $489 million, and net income was $225 million, though 1Q21 income topped that at $295 million.
Kwik Trip is looking to expand into new geographies, including North Dakota and South Dakota, and has plans for 40 new convenience stores and 10 remodels this year. Over the next five years, nationally it plans to build 40 – 50 new locations each year. Kwik Trip currently owns and operates more than 750 stores in Wisconsin, Minnesota, and Iowa. Click here to request a list of future store openings.
Stater Bros. plans to build a new store in Riverside, CA. The new store, which will replace an existing nearby location, will occupy 49,900 square feet of a former 96,900 square-foot Kmart building. Construction will begin this winter, with the store opening in summer 2022. The Company also has plans for a nearby store in Ontario, CA, expected to open in winter 2022. Click here to request a list of future store openings.
Grocery Outlet will open its first store in New Jersey in Hamilton Township, in a former Kmart. The 20,640 square-foot store is expected to open this fall. It will be the Company’s most eastern store as seen in the store concentration map below. Grocery Outlet’s stores are run by independent owner-operators from the communities they serve. Click here to request a list of future store openings.
Moe’s Southwest Grill announced the modernization of more than 50 restaurants in the Greater Atlanta, GA market. Atlanta is the latest city to experience the Company’s evolution following refreshes in Nashville, TN; Charleston, SC; and Rochester, NY. The 50 restaurants in Atlanta now feature dedicated off-premise service lines to support Moe’s growing digital business driven by online orders and an increase in catering demand. Additional upgrades include new front and back-of-house design, exterior signage, logo and menu boards, as well as a new point-of-sales (POS) system. Click here to request a list of future store openings.
Beauty company Glossier raised $80 million in a Series E funding round led by Lone Pine Capital. Existing investors Forerunner Ventures, Index Ventures, IVP, Sequoia Capital, and Thrive Capital also participated in the round. Glossier’s plans include scaling its online and offline presence with “dozens of new stores” in the U.S. and international markets. The Company said it would take an “e-commerce-first approach” when expanding to new markets. Glossier has over five million customers globally; over one million people visited physical stores in 2019. The Company has plans for three new stores in Seattle, WA; Los Angeles, CA; and London, U.K., with more openings expected for 2022. Glossier previously raised $100 million in a Series D funding round in 2019.
The Buckle’s sales for the five-week period ended July 3 increased 17.8% to $111.7 million. Compared to the same period in FY19, sales were up 49.3%. For the 22-week period ended July 3, sales increased 91.5% to $500.6 million, or 48.3% from June 2019. Sales for 2020 (between March and July) were significantly impacted by the Company’s closure of all brick-and-mortar stores due to COVID-19, so the Company does not plan to begin reporting comps again until its August results. Buckle operates 442 stores in 42 states, including one new youth store opened in St. George, UT in June. Click here to request a list of future store openings.
The North West Company has opened what it is calling a “first-of-its-kind wellness hub” in Iqaluit, Nunavut (Canada). The store features a range of health foods, a Booster Juice, a full pharmacy, and an optical center.
Salt Life, a beach-inspired apparel and accessories brand, plans to open two new stores within the next couple of months in Myrtle Beach, SC and Galveston, TX. The Myrtle Beach location initially opened as a pop-up store during the 2020 holiday season and will operate on a permanent basis starting in late August. The Galveston location will be the chain’s first store in Texas and will bring the brand’s count to 13. Plans are underway for the chain to open at least five additional retail locations in 2022. In addition to its website and freestanding stores, Salt Life distributes products in surf shops, specialty stores, department stores, and sporting goods retailers.
Redberry Restaurants, a quick-service restaurant franchisee in Canada with 135 restaurants across four provinces, announced a new multi-year development agreement with Taco Bell Canada following Redberry’s agreement to acquire 14 Taco Bell locations across Ontario. Redberry intends to develop 50 Taco Bell restaurants in Canada over the next few years. Click here to request a list of future store openings.