June 28, 2023
Deteriorating operations have forced Neiman Marcus to evaluate either a sale of its Bergdorf Goodman stores in New York City or possibly a disposition of the whole company, according to sources, who indicated that top executives plan to meet with prospective buyers for Bergdorf in New York City this week.
The reports say disagreements have developed between the three parties which purchased the Company out of bankruptcy in September 2020. Majority owner Pacific Investment Management Co. (Pimco) believes a turnaround is possible and wants to maintain control. However, minority investors Davidson Kempner Capital Management and Sixth Street Partners may want to exit their investments, blaming CEO Geoffroy van Raemdonck for the Company’s declining operations. The investors have preliminarily agreed to explore a sale of Bergdorf Goodman to facilitate a possible cash-out by Davidson Kempner and Sixth Street. Nevertheless, there are concerns that selling Bergdorf, the Company’s most prized asset, would diminish the overall value of the Company.
Prospective bidders for Bergdorf could include London-based Harrods and Selfridges, Paris based Galeries Lafayette, certain U.S. private-equity investors, and possibly investors in the Persian Gulf and Asia. JPMorgan has been selected to conduct a sale process, according to sources, who estimate that Neiman (including Bergdorf) could be worth as much as $2 billion.
According to reports¸ Forman Mills has been acquired by Shoppers World in a transaction which will keep all of the Company’s stores open. Details of the transaction are not available. This follows reports that the Company warned of a possible bankruptcy filing and store closures if it could not complete a going concern sale. Previously, we noted that on June 5, SW Group LLC, the owner of Shoppers World, sent a letter to Forman Mills’ vendors, seeking their support in its attempt to acquire the Company. That letter also indicated that the alternative may be a bankruptcy filing by Forman Mills.
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LL Flooring’s board rejected an unsolicited acquisition offer, received May 30, from Cabinets To Go, LLC, a subsidiary of F9 Brands. The Company stated that the bid to acquire its outstanding shares for $5.76 a share “significantly undervalues the worth of LL Flooring, its business and prospects and is not in the best interests of the Company and its shareholders.”
However, in a letter to F9 Brands, LL Flooring management added that "If you were to significantly increase your $5.76 per share proposal to a level that is reflective of the value of the Company, we will consider it consistent with the Board’s fiduciary responsibilities and provide you with confidential information pursuant to a customary non-disclosure and standstill agreement." LL Flooring’s closing price on June 23 was $4.29.
In the Bed Bath & Beyond, DIP case, the Debtors selected Overstock.com as the successful bidder at the auction for the Company’s intellectual property and digital assets, including the Bed Bath & Beyond brand name, business data and digital assets. The $21.5 million sale price is the same as Overstock’s stalking horse bid, which means there were no higher or more attractive bids. Overstock will not acquire any stores in the transaction. JOWA Brands was selected as a backup bidder, solely for the Company’s Wamsutta brand name, a private sheets and towels label. Ten Twenty Four, a software company that helps owners maximize vacation rental revenues, and does business as Beyond Pricing, was chosen as the backup bidder for the Company’s Beyond.com domain name.
On June 23, the Debtors notified the Court that they received “one or more” qualified bids for the auction of 152 Bed Bath & Beyond and buy buy Baby store leases and one distribution center. The Debtors are considering whether to proceed with the sale of the buybuy Baby leases.
Alimentation Couche-Tard announced that TotalEnergies has accepted its offer to acquire certain European retail assets, as announced earlier this year on March 16. TotalEnergies employee representative bodies in Belgium, the Netherlands, and Luxembourg will now enter into definitive agreements to effect the transaction. The transaction remains subject to the approval of relevant European regulatory authorities, and closing is expected to occur before year end. As previously announced, Couche-Tard will acquire 100% of TotalEnergies retail assets in Germany and the Netherlands, as well as a 60% controlling interest in the Belgium and Luxembourg entities, for a purchase price of Euro 3.10 billion, to be paid in cash.
Amazon closed its Amazon Go location in Seattle, WA, which first opened in August 2018 and was the second store to open under the c-store brand. Earlier this year the Company announced it would be closing eight Amazon Go stores, two each in Seattle and New York City and four in San Francisco. The Company has also paused the rollout of its Amazon Fresh grocery stores. This latest closure brings Amazon Go’s store count to 22 in four states, with its most recent opening in Puyallup, WA in March 2023.
Target is testing an expansion facility in Smyrna, GA to make next-day deliveries to customers in communities farther from its stores. More than 90% of Target’s online and app orders are filled in stores. The Company predicts that the new Smyrna facility would reach 500,000 new customers near Atlanta, and nearly three million farther outside of the area.
H-E-B opened an e-commerce fulfillment center in Plano, TX last week. The 55,000 square-foot facility will help with curbside and delivery orders in Plano and surrounding stores in Frisco, McKinney, and Allen. This is the Company’s sixth fulfillment center to be built since 2018, and the Company says more are planned to support further expansion into the Dallas MSA. As we recently reported, the Company is opening two Joe V’s Smart Shop by H-E-B stores in the Dallas area, with each store averaging 55,000 square feet.
Publix opened a 48,000 square-foot store in the Summerhill neighborhood of downtown Atlanta, GA, marking the first major supermarket chain to open in that area in decades. The neighborhood has been called a “food desert” for not having a major supermarket chain within the community.
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Trader Joe’s will begin constructing a one million square-foot assembly and distribution center in Palmdale, CA in December 2023. The facility is considered the first in Los Angeles County and the Company’s largest logistics location in California. It operates other facilties in Fontana and Stockton, CA. The Palmdale DC is expected to cost more than $150 million and to be completed in 4Q24. It will include an 827,000 square-foot “hub,” a 211,000 square-foot freezer facility, and a 6,000 square-foot accessory building.
Lowes Foods plans to open a Pittsboro, NC store on June 29. The new location is one of five stores the Company aims to open this year. Other stores are scheduled to open in Concord and Kannapolis, NC, and Aiken and Indian Land, SC. Lowes Foods operates more than 80 supermarkets in the Carolinas.
In the David’s Bridal, DIP case, the Debtors notified the Court of the rejection of 47 unexpired leases. This brings the total lease rejections to 49.
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In The Rockport Company, DIP case, ABG-Regatta LLC and ABG Intermediate Holdings, affiliates of Authentic Brands Group (ABG), were identified as the stalking horse bidder, with a $5.3 million deposit placed into an escrow account as part of the agreement. ABG is paying $40.4 million for Rockport’s intellectual assets, another $5 million for its Korean subsidiary, and $100,000 for its Iberian subsidiary. A break-up fee of $1.59 million payable to ABG was set should Rockport close on an alternative transaction. A transition services agreement sets monthly fees to be paid by ABG to Rockport covering costs to retain employees and other fees associated with continued operation.
Camping World is acquiring multi-location RV dealer Crain RV in Arkansas. Crain operates locations in Benton, Springdale, and Little Rock, and primarily sells Jayco, Winnebago, Tiffin, Coachmen, and Forest River products. The acquisition is expected to close in 4Q23. These locations will be converted into Manufacturer Exclusive dealerships upon completion of property and facility improvements.
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Ace Hardware announced plans to open a new retail support center located in Kansas City, MO. The new facility, spanning 1.5 million square feet, is projected to open in 2025 and employ 350 workers. The Company has opened 850 new stores in the past five years, and the new facility will help it keep pace with current demands and projected growth in the coming years.
On June 27, Raising Cane’s opened an 8,000 square-foot flagship location in Times Square in Manhattan, NY. This is the restaurant chain’s first location in New York City. Raising Cane’s operates more than 740 restaurants across 36 states, the Middle East, and Guam.
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The Habit Burger Grill is opening a 3,100 square-foot fast-casual restaurant with a drive-thru in Hamilton, NJ. This will be the first franchise-owned New Jersey location for the chain; its other 14 locations in the state are corporate-owned.
This week, FAT Brands, parent of Fatburger and 16 other restaurant concepts, plans to open a Fatburger in Riverview, FL, its first new location in the state in about 20 years. Another three locations are planned for Tampa in the next five years, in addition to 10 in Orlando in the next seven years.
Firehouse Subs opened its first location outside North America in Zurich, Switzerland. The Company also signed a development agreement to launch in Mexico later this year. Firehouse Subs is owned by Restaurant Brand International.
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