Openings, Closings, & Other Key Industry Highlights

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March 24, 2021


Dollar General released solid 4Q20 results, a subdued forecast for the FY21 topline, and more details on its aggressive expansion plans. 4Q20 sales rose 17.6%, correlating with a 21% jump in operating income for the quarter. Margins eased somewhat compared to the 21.6% sales growth for the full year, accompanied by a 54% leap in operating income. Comps were up 12.7% for 4Q and were up 16.3% for the full year. This creates a large hurdle for FY21 where comps are now guided to fall from 4% – 6% for the year, with total sales anticipated to be flat to down 2%. Expansion plans will continue and even grow as the Company targets 1,050 new stores in FY21, up from the 1,000 in FY20. Remodels were also upped to 1,750 in FY21 from 1,670 in FY20. The Company’s new store prototypes have a larger footprint, with its 7,300 traditional footprint being upsized to 8,500 and with another format going as large as 9,500 square feet. This largest format will encompass an expanded selection of products, including produce, that may start playing a larger role as its DG Fresh self-distribution of consumables expands and matures. Its new POP SHELF format test will also expand from 5 locations to 50 by year-end, up from the original goal of 30 for the year. A POP SHELF store-within-a-store will also be tested in 25 Dollar General stores this year. Long term, the Company highlighted its potential U.S. expansion opportunities, which include up to an additional 13,000 DG stores, increased from previous guidance of 12,000, in addition to up to 3,000 POP SHELF stores and 1,000 DGX, small-format stores. Click here to request a list of future store openings.


Amazon Fresh opened a new 40,000 square-foot store in Long Beach, CA, the Company’s eighth location in Southern California and 12th in the nation. Click here for a list of Amazon future store openings.


Petco’s 4Q20 (ended 1/30/21) sales advanced 16%, with digital sales climbing more than 90%. Higher SG&A costs limited the Company’s adjusted EBITDA gain to 13%, while adjusted EBITDA margin was down 40 bps to 11.1%. Over the last 12 months, there were 24 net fewer stores, resulting in 1,454 total pet centers. FY20 sales increased 11%, benefiting from an 11% growth in comps, and more than three million new members. FY20 gross margin eroded 20 bps, and management blamed COVID-19 incremental costs for the deleverage. Adjusted EBITDA advanced 14%, for a margin of 9.8%. In 4Q20, the Company strengthened its balance sheet by using IPO proceeds to pay down debt, and completed a refinancing, which extended maturities to 2026 and beyond. As a result, total debt decreased almost 50% to $1.65 billion. Liquidity consisted of approximately $111.0 million in cash and $388.0 million in revolver availability. FY21 sales are expected to be $5.25 billion - $5.35 billion, with an adjusted EBITDA margin of 9.9%. Click here to request a list of future store openings and closings.


On Monday, Alimentation Couche-Tard announced an agreement to sell 49 sites in Oklahoma to Casey’s General Stores for $39.0 million in an all-cash transaction. The deal includes 46 leased and 3 owned properties and is expected to close by July 31. In a separate but related initiative, Couche-Tard has retained a real estate advisory firm specializing in the convenience and fuel industry to coordinate the sale of 306 sites across its North American network. The sites include 269 units in 25 U.S. states and 37 across 6 provinces in Canada, with an average store size of approximately 2,600 square feet and an average lot size of 29,500 square feet. Of the 306 sites, 122 are owned and 184 are leased, while 238 properties sell fuel and 68 are convenience only. Expressions of interest are due in early May. Click here to request a list of Casey's future store openings.


American Eagle Outfitters has signed leases with mall operator Westfield for seven Aerie stores in Paramus, NJ; Bethesda, MD; Skokie, IL; National City, CA; Seattle, WA; Bay Shore, NY; and San Jose, CA. In addition, two standalone stores, adjacent to planned Aerie stores in Paramus and Bethesda, are slated for Aerie’s new women’s activewear brand, Offline by Aerie, which was introduced last summer; the line includes leggings, bike shorts, tops, sports bras, fleece, bottoms, and accessories. Offline by Aerie opened its first standalone store in Nashville, TN last fall. Another 25 - 30 locations (standalone, side-by-sides, and in-store shops) are planned for this year. American Eagle plans to open roughly 50 Aerie units this year, which would bring the banner’s total units to 400 by year end. The chain expects to have 500 - 600 units by 2023. Click here to request a list of future store openings and closings.

Our Quarterly Sales Analysis details industry trends and how competition stacks up in terms of sales performance metrics. Click here to request a copy of the full report on Department Stores.


Sprouts Farmers Market recently opened a new 135,000 square-foot produce distribution center in Aurora, CO. It is the Company’s first DC in the state, serving 45 stores including all of its Colorado locations, five stores in Utah, and eight units in New Mexico. Sprouts currently operates five other DCs in Colton and Union City, CA; Glendale, AZ; Wilmer, TX; and Atlanta, GA. Sprouts plans to open its seventh DC in Florida later this year to help support its retail expansion, including 20 new stores in 2021. Click here to request a list of future store openings.


Five Below bounced back from a tough 1H20 and finished the fiscal year with record 4Q comp growth of nearly 14%. The Company exceeded its initial 4Q projections, with revenue up 25% compared to its earlier projection of 21%. For the full year, revenue grew 6%, but comps stayed in negative territory, down 5.5% due to store closures in late 1Q, and 2Q. FY21 guidance calls for sales of $540.0 million - $560.0 million, double the pandemic-hobbled results of last year. Five Below plans on entering two new states this year, Utah and New Mexico, and has slated 170 - 180 new store openings. Click here to request a list of future store openings.


Amazon has reportedly surpassed Walmart as the leading apparel retailer in the U.S., driven by the surge in online shopping arising from the pandemic. Amazon’s apparel and footwear sales in the U.S. grew roughly 15% in 2020 to more than $41.00 billion, which is 20% – 25% above rival Walmart.

In other news, Walmart has eliminated rules requiring sellers on its marketplace website to be registered in the U.S. It is Walmart’s latest attempt to compete better with Amazon and tap into China’s network of manufacturers.

Amazon also announced plans to roll out Amazon Care, its on-demand healthcare service, across the U.S. this summer. The move follows the launch 18 months ago of Amazon Care, which provides medical care to Amazon employees and their families. Amazon Care consists of virtual care and in-person care, where Amazon Care can dispatch a medical professional to a patient’s home for additional care. Until recently, Amazon Care was exclusively available to Amazon employees and their families in Washington State, but as of last week, became available to other Washington-based companies; this summer it will be rolled out to the public and made available to other companies in all 50 states.

Amazon Care grew out of an initiative announced in 2018 with J.P. Morgan and Berkshire Hathaway to shift how they collectively handle employee healthcare needs, but the partnership has since dissolved. This is the latest healthcare service launched by Amazon; last November, the Company launched Amazon Pharmacy, following its 2018 acquisition of online pharmacy PillPack. 

While Amazon will likely not be able to provide significant cost savings to insured patients, Amazon Prime members without insurance are able to receive discounts, even at competing retailers, including CVS, Walgreens, Rite Aid and Walmart, which threatens discount drug card companies like GoodRx. It appears Amazon Care will bypass other health plans and charge companies a fee for the service. This could be disruptive to the clinic and virtual care initiatives being launched by drug retailers, including CVS Health’s MinuteClinic and Walgreens’ VillageMD businesses. Click here to request a copy of our Special Analysis on Amazon Pharmacy.


Scheels will open a new 220,000 square-foot store in Colorado Springs, CO on March 27. This will be Scheels 29th location. The Company also plans to open a 110,000 square-foot store in Missoula, MT later this year, in a former J.C. Penney location. Click here to request a list of future store openings.


Reports indicate Neiman Marcus sold $1.10 billion in senior secured notes last week, according to a confidential memorandum. The Company emerged from bankruptcy in September 2020 with its senior lenders, Pacific Investment Management Company LLC, Davidson Kempner Capital Management, and Sixth Street Partners, swapping debt for equity and becoming its new owners. The reorganization eliminated $4.40 billion of the $5.00 billion in debt Neiman had at the time, and about $200.0 million in annual interest payments. Reports suggest the Company is also interested in amending its $900.0 million ABL with a consortium of banks led by Bank of America, to loosen certain provisions that may restrict availability of borrowings. Neiman Marcus received $750.0 million in exit financing from its three owners, and secured a $125.0 million FILO facility led by Pathlight. By selling the $1.10 billion in notes last week, the three owners have reduced their exposure as lenders, while Neiman has slightly increased its debt level since emerging from bankruptcy. The memorandum reportedly states the Company believes its reorganized balance sheet and operating structure “provide ample liquidity and flexibility to respond quickly to evolving trends.” However, it warned, “We will continue to be highly leveraged following the consummation of the transactions, and as a result, a significant amount of our cash flow will be used to pay interest and principal on our outstanding indebtedness, and we may not generate sufficient cash flow from operations, or have future borrowings available under our ABL.” The memo also pointed out that 22 of the Company’s 44 stores are located in cities in California, Florida, Texas, and New York; many of these stores normally rely on international tourism, which has dropped to near zero due to the pandemic. For the six months ended January 30, 2021, Neiman’s sales decreased 32.6% to $1.63 billion, with online sales (44% of total sales) down 6% and store sales down 33.6%. Adjusted EBITDA fell 67.1% to $84.7 million. 


Schnuck Markets will open a new 18,000 square-foot store in Jasper, IN this summer. The leased store will include a heavy focus on fresh departments such as produce, meat, seafood, and bakery. It will be Schnucks’ seventh Indiana store, joining six others in the Evansville area. Click here to request a list of future store openings.


Chipotle Mexican Grill will continue its expansion into Canada with a new location in Surrey, BC that will open on March 30. The restaurant will be Chipotle's first new Canadian location since its Markham, Ontario restaurant opened in October 2018. Click here to request a list of store openings.


Destination XL’s 4Q20 comps fell 23.4%; store comps declined 37.3%, partially offset by a 12.9% increase in direct sales. Management noted that sales increased sequentially during the quarter and while February sales deteriorated, March month-to-date comps are flat to FY19 (obviously well ahead of FY20 when stores began to close). As a result of the lower sales and gross margin erosion, EBITDA plunged 93% to just $0.7 million. Due to the impact of the pandemic, especially early in FY20, full-year EBITDA was negative ($24.2 million). The Company ended the quarter with $30.5 million of liquidity. Subsequent to year-end, DXL raised $5.0 million (before offering costs) through a registered debt offering and refinanced its FILO term loan, increasing maximum borrowings from $15.0 million to $17.5 million. Management estimates the new facility will add between $5.0 million and $10.0 million of excess availability each month in FY21. In FY21, DXL expects sales of approximately $385.0 million - $402.0 million, and adjusted EBITDA of approximately $11.0 million - $18.0 million. During FY20, the Company closed 12 stores and currently has 131 locations with either a natural lease expiration or a kick-out option. The Company stated it is right-sizing its store portfolio through lease negotiations or lease-term expirations. 


A Price Chopper store in Marlborough, MA is reportedly expected to undergo a $4.5 million renovation to become a more upscale Market 32 location, part of a wider Price Chopper rebranding plan. In November 2014, parent Golub Corp. announced a rebranding and modernization initiative for its Price Chopper chain. At the time of the announcement, the Company said it planned to renovate and rebrand nearly all its Price Chopper stores into Market 32 stores over an eight to nine-year period, giving the stores enhanced product selections and dining options. However, as of January 2020, more than five years into the initiative, the Company only had 25 Market 32 stores in operation in New York, Massachusetts, Connecticut, Vermont, and Pennsylvania. Click here to request a list of future store openings.


Fabletics expects to open 24 new stores this year nationwide, including one that opened earlier this month in the Mall of America in Bloomington, MN. Others are slated for Alabama, Arizona, Colorado, Iowa, Kansas, Maryland, Michigan, Massachusetts, North Carolina, and Oregon; two in Texas; and three each in California and Virginia. By year-end, the chain expects to have 74 physical locations. Click here to request a list of future store openings.


Luby’s completed the sale of certain Company-owned Fuddruckers restaurants and the franchise of those stores to affiliates of Black Titan Holdings, LLC. Terms were not disclosed. The transaction included the purchase of Luby’s assets for eight locations in Arizona, Texas and Virginia. As a result, Black Titan has become one of the largest Fuddruckers franchisees in the U.S. Luby’s expects to sell an additional five more Fuddruckers stores across Arizona, Kansas, Missouri and Texas to Black Titan. 

Luby’s disclosed that late last month it completed the sale and franchising of its previously owned Fuddruckers unit in Houston, TX to HPCP Investments, LLC, an affiliate of Christopher Pappas.