June 8, 2022
Our analysts confirmed that Antero Brands is closing 22 Olympia Sports stores, leaving it with approximately 40 locations (most of the stores are expected to close by the end of June). The closures will leave the Company with stores in Massachusetts, New York, New Hampshire, Vermont and Pennsylvania; it is exiting Connecticut, Maryland, New Jersey and Ohio. The Olympia Sports website has been down since at least early May, and in April, the Company sold the shoes.com trade name to Designer Brands for $4.9 million. Click here to request a sample list of Olympia Sports future closings.
Three months after introducing three new Amazon Fresh grocery locations in the Southern California market, Amazon is opening a Fresh store in Huntington Beach, CA. The 35,000 square-foot site features the Company’s “Just Walk Out” frictionless, cashierless technology. Of the 31 Amazon Fresh units opened to date, the new Huntington Beach location is the 15th in Southern California. The Company recently announced it will open stores in Paramus, NJ and Oceanside, NY, the first in each state. In either case, the relatively slow expansion for Amazon’s standards and expectations underline the challenges the Company is facing in operating brick-and-mortar grocery stores with inherently thin margins.
Amazon will build a 140,000 square-foot delivery station in Centerville, MN. The facility could open by fall 2023. Amazon already has two delivery centers in the Twin Cities metro area, located in Eagan and Maple Grove. It also announced one in St. Cloud last year, and others are reportedly planned in the Duluth and Rochester, MN markets.
Amazon completed construction on a new 430,000 square-foot office building, located in Boston, MA. The building provides space for more than 2,000 employees working across Amazon Alexa, Amazon Pharmacy, Amazon Web Services, and Amazon devices.
On June 1, Amazon opened a new 54,000 square-foot Whole Foods Market in New York City’s NoMad (short for North of Madison Square Park) neighborhood.
7-Eleven opened the ninth overall store under its Evolution concept and fifth under the format in the Dallas-Fort Worth metro area, where the Company is based. All of the Evolution Stores test new products and services and have in-house restaurants, but otherwise differ by unit and are curated to their respective neighborhoods. This latest Dallas Evolution Store features an in-store foodservice area with tacos from Laredo Taco Co., and serves drinks like frozen margaritas and draft beers, which customers can enjoy outside on a covered patio. The unit also offers customizable beverages, including grab-and-go coffee drinks, organic smoothies, shakes, vitamin-infused sparkling water, and wines from its Wine Cellar section. In addition to new product offerings, customers can bypass checkout and pay directly from mobile devices using the 7Rewards app, as well as order more than 3,000 items for delivery.
Walmart is adding four new “next generation” fulfillment centers over the next three years. The first will open this summer in Joliet, IL, with others planned for McCordsville, IN (Spring 2023); Lancaster, TX (Fall 2023); and Greencastle, PA (2024). The centers, which feature robotics and machine learning, double the capacity and number of orders filled in a day. The four facilities will be able to provide 75% of the U.S. population with next or two-day shipping on millions of items, including Marketplace items shipped by Walmart fulfillment services. Combined with its traditional fulfillment centers, Walmart claims it can reach 95% of the U.S. population with next or two-day shipping.
Publix opened a new store in Yulee, FL, just north of Jacksonville. Anchoring a mixed-use development in a planned community, the new location includes a deli, bakery, meat and seafood counter, fresh produce department, floral section, gourmet meats and cheeses offering, premium wine and beer section, and pharmacy. Curbside pickup and home delivery are available through Instacart. Click here to request a sample list of future openings.
Kohl’s Corporation announced that following the receipt of final proposals, it entered into a three week exclusive negotiation period with Franchise Group, Inc. (FRG), relating to FRG’s proposal to acquire Kohl's for $60.00 per share in cash. The price reflects a 42.5% premium over Monday's closing stock price of $42.12 (the price is down about 15% so far this year). Initial bids for Kohl’s were in the $60 plus range, and the 52-week high price was $64.38. Before posting disappointing 1Q22 results and lowering its FY22 outlook, Kohl’s had indicated that it believed it was worth at least $70.00 per share. The $60.00 offer price values the equity at nearly $8 billion. Click here to request more info.
Lululemon’s 1Q22 sales rose 31.6%, with strong performance across all products, channels and regions, despite the ongoing impact of COVID-19, strained global supply chains, and inflationary pressures. Revenue was up 32% in North America and 29% internationally. Comparable store sales increased 24%, with e-commerce sales up 32% and representing 45% of total sales. In 1Q22, the Company opened five new locations, bringing the total to 579 stores. Click here to request a sample list of future openings.
Victoria’s Secret & Co. reported net sales decreased 4.5% to $1.48 billion in 1Q22. This result tracked on the favorable side of the previously communicated guidance range of a decrease of 4% to 8%. Comparable sales decreased 8%. During 1Q22, there were three store closures in the U.S., bringing the total Company-operated store count to 831. By region, there were 805 stores in the U.S. and 26 in Canada; an additional 71 stores operated in China under a joint venture.
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 here to request a copy of the full report.
Sportsman’s Warehouse reported 1Q22 comps fell 11.6%, while EBITDA plummeted 45%. 2Q22 comps are expected to drop 10% to 16%. As we have been reporting, after experiencing an unexpected surge in sales during the pandemic, we expected results would normalize, and the Company’s legacy issues would resurface, including its over-reliance on cyclical firearms sales. We expect firearm sales to continue to decline going forward, while firearms may soon see more government regulations in response to a number of recent mass shootings. Meanwhile, in the face of these headwinds, the Company continues to open new stores, adding 13 over the past 12 months, with 10 new locations planned for FY22.
The Container Store’s 4Q22 sales were down 2.9% to $305.5 million, with the extra week in the prior-year period contributing 580 bps of the decrease. Retail sales (TCS) fell 2.6% to $286.5 million, with general merchandise categories down 8.7% and Custom Closets up 3.6%. During FY21, the Company opened one new store in Annapolis, MD, ending with 94 units. During calendar 2022, the Company expects to open a store in Colorado Springs, CO in the fall and Salem, NH in the winter.
Restaurant Brands International’s Tim Hortons division announced two new U.S. formats — a 24-seat, 1,600 square-foot version and a 900-square-foot drive-thru-only version. The larger format includes a designated mobile order pickup area and VIP mobile order parking spots. The first under the drive-thru-only concept is slated to open this summer in Cross Lanes, WV, a suburb of Charlestown; eight additional units are scheduled to open throughout 2022 in Michigan, New York and Ohio. Restaurant Brands International also owns the Burger King, Popeyes Louisiana Kitchen and Firehouse Subs concepts.
On June 15, Lidl will open a new store in Garden City Park, NY (Long Island). It is the Company’s 23rd on Long Island. Click here to request a sample list of future store openings.
Chico’s FAS reported 1Q22 sales grew 39.4% to $540.9 million, reflecting a comp increase of 40.6%, partially offset by 29 permanent store closures over the last year. The comp increase was driven by an increase in transaction count and higher average dollar sales. By brand, sales were up 52% at Chico’s (48.9% of total sales), 64.8% at White House Black Market (WHBM, 31.2% of total sales), and down 1.4% at Soma (19.9% of total sales). Since FY19, sales were up 0.8% at Chico’s, 14% at WHBM, and 37.5% at Soma.
Lands’ End’s 1Q22 sales fell a worse-than-expected 5.5%, primarily on weak e-commerce results, partially offset by strength in the Company’s Outfitters and Third Party segments. Outfitters revenue rose 33% due to stronger demand across all three sales channels, while Third Party revenue rose 83% due to the expansion of its Kohl’s partnership and the successful launch of its QVC on-air partnership. The Company is currently present in 300 Kohl’s locations and plans to expand to 500 by this fall and 600 by the end of the year.
The Buckle’s May 2022 sales increased 5.1% to $94.3 million, and comps were up 5.3%. For the 17-week period ended May 28, sales were up 3.7% to $403.4 million, and comps rose 4.1%. The Company currently operates 440 stores in 42 states, down from 441 stores a year ago.
Our Hot Market Report takes a closer look at the Minneapolis, MN 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. Click here to request a copy of the full report.
Conn’s decision to expand during a period of macroeconomic turbulence is negatively impacting operations. This comes at a time when its subprime customers are reducing discretionary expenditures as they adjust to inflation and higher interest rates. 1Q23 sales fell 6.6%, due to a 9.5% decrease in comps, despite opening nine stores during the year (three opened in 1Q23). During FY23, the Company plans to open 20 to 34 new stores in existing states, including 10 to 14 standalone locations and 10 to 20 store-within-a-store locations. Click here to request a sample list of future openings.
Joann’s 1Q23 (ended April 30) net sales declined 13.3% to $498 million, with total comps decreasing 12.9%. On a two-year stack, comps increased 2.1%. The Company stated that March was its worst month, cycling the stimulus last year and with consumer traffic dropping off with the onset of the war in Ukraine this year. Comps during May, the first month of 2Q23, are trending in the negative high single-digits, with significant softness in higher ticket discretionary purchases. CEO Wade Miquelon commented that he expects “the operating environment to remain challenging through at least the next few quarters” and that “entering recession is highly probable, and in fact, maybe the most likely scenario.” The Company now projects 36 remodel projects this year and 20-25 next year as it prunes its capital budget to save cash. It also commented on contractor project delays and hefty construction and equipment premiums as further impetus to slow capital spending. The Company did state that retaining its cash dividend ($4.5 million last quarter) is a priority. Click here to request a sample list of future openings.
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