On May 11, Marsh Supermarkets Holding, LLC, DIP filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. District of Delaware.
Since the filing, several orders were issued, including: interim orders authorizing the Debtors to pay up to $6.2 million in critical vendor payments; authorizing payment of up to $3.2 million in PACA/PASA claims; authorizing payment of up to $50,000 in lien claims; authorizing the joint administration of the Debtors’ Chapter 11 cases (case #17-11066); and authorizing store-closing sales for 19 retail units. The Debtors were also given authorization for post-petition use of cash collateral and granting adequate protection to the pre-petition secured lenders, including the $60.0 million revolving credit facility, $5.2 million in senior liens, consisting of $2.5 million in loans and $2.7 million in letters of credit, and a $24.4 million junior note. A final hearing date for the interim orders and hearing on the Debtors' motion to reject 15 unexpired leases is scheduled for June 6, with objections due May 30, 2017.
Click here for Marsh Supermarkets' store list.
Central Grocers/Albertsons Companies
Jewel Foods Stores Inc., a subsidiary of Albertsons Companies, agreed to acquire 19 Strack & Van Til stores from Central Grocers, Inc., DIP. A motion was filed yesterday by Central Grocers seeking Court approval for the asset purchase agreement, under which Jewel-Osco will serve as the stalking horse bidder. The acquisition price is $70.0 million for the stores, plus the cost of inventory, which is estimated at $30.0 million. There is also a break-up fee equal to 3% of the purchase price, plus up to $500,000 of expenses incurred. The 19 stores will be sold as going concerns.
In other news, published reports indicate that independent retailer-owners of Central Grocers, DIP are finding new suppliers in the wake of the cooperative’s bankruptcy filing. According to sources, Supervalu has secured new customers, including Sunset Foods, Potash Bros., Shop & Save Markets, Garden Fresh and Cermak Fresh Markets, which it would serve from its Champaign, IL, distribution center. Associated Wholesale Grocers has added new business from Angelo Caputo’s Fresh Market, Treasure Island Foods, Fairplay Foods, and Pete’s Fresh Market. Those stores will be served from AWG’s facility in Kenosha, WI.
Click here above for Jewel Food Stores' full stores list.
Nordstrom reported first quarter sales increased 2.7% to $3.28 billion, comps decreased 0.8%, and profit jumped 37% to $63.0 million. Quarterly net earnings included an interest expense charge of $18.0 million related to a $650.0 million debt refinancing, and earnings in the prior-year period included non-operational charges of $30.0 million, primarily related to higher credit chargeback expenses associated with an industry change in liability rules. To date in fiscal 2017, the Company opened six Nordstrom Rack stores and closed one full-line store, ending the first quarter with 353 total locations. Nordstrom reiterated its annual outlook for EPS of $2.75 – $3.00, a net sales increase of 3% – 4% and approximately flat comparable sales.
Click here for Nordstrom's full store list.
Last Wednesday, Kroger opened a new fresh-focused convenience store in Columbus, OH called Fresh Eats MKT, which CFO Mike Schlotman described as “a different kind of convenience store.” The small-format store carries grocery staples, including produce, meat, dairy and bakery items. While Mr. Schlotman called the concept a “small test” for the Company, it could be considering a rebrand of its existing Turkey Hill convenience stores to the Fresh Eats MKT banner. Kroger, which operates more than 200 Turkey Hill Mini Markets in Pennsylvania and Ohio, has stepped up its selection of grab-and-go and on-site prepared foods at the convenience chain.
In addition, Kroger’s Roundy’s division will close two Pick ‘n Save stores in New Berlin and Pewaukee, WI on June 16. According to the Company, “after careful consideration of the long-term financial performance of these two stores, our efforts did not bring about the results needed to meet our business goals and objectives. Therefore, we have made a decision to close these stores.” Each of the stores that is being shut is near an existing Pick ‘n Save. Kroger plans to invest at least $50.0 million in its Milwaukee-area stores this year.
Meanwhile, Kroger is in the process of replacing five of its Dayton, OH-area grocery stores with larger Marketplace concepts. Kroger has not said how much each will cost, but recent rebuild and replace projects typically cost about $20.0 million. The replacement stores are located in Centerville (expected to open by June), Fairborn, Liberty Township, Springfield and Moraine.
Click here for Kroger's full store list.
Dillard’s reported a 5.6% decrease in first quarter net sales to $1.45 billion, as comps declined 4%. Quarterly merchandise sales (which excludes the Company’s CDI Contractors construction business) fell 4.3% to $1.386 billion. Sales of ladies apparel outperformed other merchandise categories, followed by the juniors’ and children’s apparel category, while cosmetics, home and furniture, and ladies' accessories and lingerie were weaker-performing categories. Total net income dropped more than 14% to $66.3 million. During the quarter, Dillard’s opened one replacement store in Nashville, TN; purchased a former Macy’s location in Layton, UT; and purchased a replacement store in Temple, TX. Both stores are slated to open in fall 2017. As of the end of the first quarter, the Company operated 268 Dillard’s and 25 clearance centers in 29 states. CEO William T. Dillard, II, stated, “While our sales decline weighed heavily on our operating results, we remained active in returning cash to shareholders through $93.0 million of share repurchase and dividends. We still ended the quarter with $302.0 million of cash largely due to better cash management.”
Click here for Dillard's full store list.
According to the CEO of ALDI U.S., Jason Hart, internal studies show that its prices are 21% lower than its lowest-priced rivals, including Walmart. Mr. Hart said he plans to maintain that gap going forward. His strategy centers on adding more private-label goods, along with the previously disclosed plans to spend $1.60 billion to expand and remodel 1,300 U.S. stores as well as open 400 new stores, mainly in Florida, Texas and on both coasts by end of 2018. Mr. Hart also pledged ALDI will be willing to change prices more frequently to respond to rivals if needed. Mr. Hart commented, “We are re-merchandising, remodeling, enhancing our product range and are focused on gaining volume so more customers start their shopping at ALDI and we are able to complete their shopping lists more so than we have in the past.”
Back in February, Walmart said it was running a new price-comparison test in at least 1,200 U.S. stores and squeezing packaged goods suppliers in a bid to close a pricing gap with ALDI and other U.S. rivals like Kroger. Walmart launched the price test across 11 Midwest and Southeastern states such as Iowa, Illinois and Florida, focusing on price competition in the grocery business that accounts for 56% of the Company’s revenue.
In other news, ALDI plans to spend about $180.0 million to remodel 130 of its 150 Chicago, IL-area stores by 2020. The stores will be brighter, more contemporary, and in some cases, slightly larger, up to about 13,000 square feet, to allow for an expansion of private-label natural and organic items.
ALDI also said it is investing more than $80.0 million in its stores in the Charlotte, NC; Columbia, SC; Raleigh-Durham, NC; and Winston-Salem, NC markets and surrounding metro areas. ALDI will also invest an additional $8.0 million to upgrade and expand its Salisbury, NC division warehouse, in addition to an $18.0 million investment to remodel 13 stores across “the Upstate” region in South Carolina, which includes Greenville, Spartanburg and Anderson.
ALDI, Walmart and other retailers are gearing up for the arrival of Lidl, which is expected to launch its first stores in the area next month.
Click here for ALDI's full store list.
REI has taken over two spaces previously occupied by Sports Authority, in Dillon and Greenwood Village, CO. The Dillon store re-opened May 5. The Greenwood Village store, which will replace REI’s Englewood store, is a significantly larger space at 45,000 square feet (compared to Englewood’s 25,000 square feet) and is slated to open this fall. REI has eight other stores throughout Colorado, with nearby locations in Denver, Lakewood and Colorado Springs. The Company operates 147 stores in 36 states.
In other news, REI is partnering with gym operator Momentum TM Indoor Climbing to launch REI Co-Op Climb, which will sell climbing gear and offer classes for members of all levels at each of Momentum’s new climbing gyms. REI Co-op Climb will debut inside the Momentum in Katy, TX when the 36,000 square-foot gym opens on July 15. The facility will feature 29,000 square feet of rope climbing, bouldering, training walls and kids climbing. The 40,000 square-foot Momentum in Silver Street, TX (near Houston) will also feature an REI Co-op, which is scheduled to open later this year.
Click here for REI's full store list.
Kohl’s Corporation’s first quarter sales decreased 3.2% to $3.84 billion, and comps were down 2.7%. Profit jumped 288.2% to $66.0 million after the Company’s difficult prior year first quarter, which brought profit down to $17.0 million. CEO Kevin Mansell said, “We are encouraged by the significant improvement in sales and traffic for the March and April period, after a weak February start to the first quarter. Continued strong inventory management led to a major improvement in gross margin, and our teams managed expenses exceptionally well. I am pleased to say that combined together these efforts led to an increase in income for the period.” Kohl’s ended the quarter with 1,154 Kohl’s stores, 12 FILA Outlet stores, and three Off/Aisle clearance centers in 49 states.
Click here for Kohl's full location list.
Published reports indicated that Lidl has started seeking approvals from local cities for new stores and has purchased land in North Texas as it prepares for its U.S. expansion. “A search of area county records found a half dozen locations where Lidl has either purchased land or set in motion planning and zoning requests in Frisco, McKinney, Little Elm, North Richland Hills, Rockwall and Wylie. So far, Lidl has spent more than $10.0 million on land purchases in North Texas, according to county records."
Click here for Lidl Denmark's full store list.
According to published reports, Martin’s Food Markets, a division of Ahold Delhaize, may be getting close to announcing what will happen to the last of its Richmond-area stores not being sold to Publix. Martin’s announced the sale of 10 of its 19 stores to Publix last July. Martin’s disclosed that one of the nine Richmond-area stores that Publix is not buying will close on June 30 when its lease expires. It had said at the time of the sale that it hoped to find buyers for the eight other area stores but did not expect to operate the remaining locations beyond 6 – 12 months. Martin’s also has informed the Virginia Board of Pharmacy that it plans to close pharmacies at three stores by the end of May.
Click here for Martin's Food Markets' full store list.
Last night, rue21, inc., DIP filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court in the Western District of Pennsylvania. The case has been assigned to the Honorable Gregory L. Taddonio. The proceedings have been assigned case number 17-22045. In conjunction with the restructuring, rue21 said it has entered into a Restructuring Support Agreement (RSA) with certain of its stakeholders that confirms the support of the Company's key constituents for the restructuring process and contemplates, among other things, an emergence from Chapter 11 proceedings in the fall of 2017 with a significantly deleveraged balance sheet. In particular, lenders holding 96.8% of the Company's secured term loan, bondholders representing 60.2% of the Company's issued and outstanding unsecured notes, and the Company's majority shareholder each executed the Restructuring Support Agreement. The Company has also reached agreements, subject to the approval of the Court, to obtain up to $125.0 million in ABL Debtor in Possession financing from its existing ABL lenders and up to $50.0 million in new money term loan Debtor in Possession financing from a subset of its existing term loan lenders. This financing is intended to provide the Company with the liquidity necessary to support its ongoing business operations during the financial restructuring process. Management also commented, “Last month, the Company began the process of closing approximately 400 underperforming stores in its 1,179 store fleet in order to streamline operations, better align the size of its footprint with market realities, and focus on its hundreds of highly performing locations. rue21 may evaluate additional store closings as it continues to manage its real estate lease portfolio.”
Click here for rue21's full store list.
Abercrombie & Fitch
Abercrombie & Fitch confirmed last week that it is in preliminary discussions with several companies regarding a sale. The Company is working with investment bank Perella Weinberg Partners to field takeover interest from other retailers, which published reports say may include rivals such as American Eagle Outfitters or Express, though neither company has commented publicly. Abercrombie has suffered from slumping sales in recent years and intense competition from other teen apparel businesses, fast-fashion chains, off-price chains and online commerce sites. The Company recently began remodeling stores in an attempt to improve results, with 64 Hollister stores remodeled last year and the first Abercrombie store remodel in more than 15 years announced in February 2017. In addition, last month the Company also signed a deal with e-commerce site Zalora to sell merchandise through its online stores.
Click here for Abercrombie & Fitch's full store list.
According to a USDA news release, Fairway Georgetowne LLC, Brooklyn, N.Y., has posted a $25,000 surety bond with the U.S. Department of Agriculture to obtain a license to operate in the produce industry. The Company was required to post a bond following its prior involvement in bankruptcy, under Perishable Agricultural Commodities Act rules. Fairway Group Holdings Corp., which operates Fairway Markets in New York, New Jersey and Connecticut, filed for Chapter 11 bankruptcy last year. It opened a store in Georgetown, NY in January, after reorganizing and closing one location. USDA will hold the bond for three years as assurance the Company will be able to pay for produce purchased and conduct business according to PACA rules.
Click here for Fairway's full store list.
Weis reported first quarter sales growth of 15.4% to $852.2 million, primarily reflecting the addition of 44 new stores since August 1, 2016. Comps, excluding fuel and adjusted for the New Year’s and Easter holiday shift in 2017, rose 0.5%. However, gross margins were negatively impacted by industry-wide deflation, and higher expenses related to the increased store base ultimately led to a 41.2% decline in net income, to $11.8 million. Since the May 10 earnings release, the Company’s stock has fallen about 6% to close at $54.32 yesterday.
Click here for Weis Markets' full store list.
Sprouts Farmers Market
Sprouts Farmers Market may open its first Orlando, FL-area store next year in Winter Park. Sprouts has been looking at possible Central Florida locations for at least the last two years. There are 10 food retails stores within a three mile surrounding radius of Winter Park. Operators include ALDI, Publix, The Fresh Market, Trader Joe’s and Whole Foods.
Click here for Sprouts Farmers Market's full location list.
Brookshire Grocery reopened four stores under the Super 1 Foods banner in Pine Bluff, AR; the stores previously operated under the Brookshire’s Food Stores name. The Company now operates 38 of its 177 stores under the Super 1 Foods banner in Arkansas, Louisiana and Texas.
Click here for Brookshire Grocery's full store list.
Yesterday, Stater Bros. reopened a newly renovated store in San Diego, CA. The store’s total footprint of 35,250 square feet remained the same, but the Company’s back room shrank, and it expanded its organic offerings.
Click here for Stater Bros.' full store list.
The Wendy's Company
Wendy’s reported a first quarter sales decline of 24.5% to $285.8 million. The decrease resulted primarily from the ownership of 301 fewer Company-operated restaurants, partially offset by higher franchise royalty revenue and fees and franchise rental income. North America same-restaurant sales rose 1.6%. Adjusted EBITDA fell 9.1% to $89.2 million, and net income fell 11.9% to $22.3 million. During the quarter, the Company opened a net of six stores in North America and eight stores internationally.
Looking ahead at fiscal 2017, Wendy’s expects adjusted EBITDA to increased 2% – 4% to $400.0 million – $406.0 million; EPS growth of 13% – 18% to $0.45 – $0.47; and comp growth of 2% – 3% for the North America system.
Click here for The Wendy's Company's full location list.
Future Retail Store Closings
AggData monitors upcoming retail store closings throughout the day and maintains an active database of store locations and anticipated closing dates. Here is a sample of recently announced store closings.
Please contact AggData to request a full future store closing list.
Through a partnership with Walmart’s Jet.com, a concept store called “Story” opened last week in a temporary location in New York City for Jet to sell fresh groceries. The move comes as Walmart continues to drive new initiatives to try to compete with Amazon in the grocery segment.
In other news, for the first time Walmart is offering customers in China the ability to order from its U.S. Sam’s Club stores. It is Walmart’s latest attempt to boost growth in China since it sold its online business in the country to Chinese e-commerce giant JD.com in June 2016 (Walmart has a 12% stake in JD.com). About 200 products from Sam’s Clubs stores will initially be available, expanding to 700 this year. The Company is focusing on personal care, baby supplies and nutritional supplies that are mostly not available in China. Sam’s Club has sold products on JD.com since October 2016, drawn from the stock in its 15 physical stores in China. Walmart also operates more than 400 stores in China. The Company is also tweaking its partnership with JD’s delivery service, Daojia, to guarantee one-hour delivery, down from two hours, and expanding the number of stores where delivery is available. It expects to reach 180 stores this year.
Click here for Walmart's full store list.
Fresh Thyme Farmers Market
Last week, Fresh Thyme Farmers Market opened two new locations in Brookfield and Menomonee Falls, WI. The Company currently has about 50 stores and expects to have 70 in operation by the end of 2017.
Click here for Fresh Thyme Farmers Market's full store list.
During May and June, Petco will open two new stores located in Lodi, CA and Quakertown, PA; relocate one store in Chandler, AZ; and remodel one store in Denham Springs, LA.
Click here for Petco's full store list.