May 24, 2023
WHP Global, which acquired Toys “R” Us in 2021, entered into a partnership with travel retailer Duty Free America to open the first Toys “R” Us airport location. The store will be located in Terminal A at Dallas Fort Worth International Airport, slated to open ahead of the 2023 holiday season. The store will feature a curated selection of toys and games with demonstration tables for hands-on play. Management indicated that the concept of rolling out stores inside airports has the potential to be expanded to airports worldwide. Since its acquisition, Toys “R” Us has doubled its footprint by 50%, with the national rollout of in-store shops at all Macy’s stores. In April, it partnered with Mexican retailer El Puerto de Liverpool to launch in Mexico for the first time, joining international locations in India and the U.K. Duty Free America operates about 200 stores in airports, border crossings, and seaports in the U.S., Latin America, and the Caribbean, and other international locations.
Tempur Sealy International announced it agreed to acquire Mattress Firm Group in a cash and stock transaction valued at $4 billion on May 9. Last week, Tempur Sealy disclosed that the companies submitted their merger application to the FTC in October 2022 and the FTC initiated an investigation two months later. In December 2022, the FTC issued a second request for more confidential data about the planned transaction.
The parties initially projected the acquisition would close by May 9, 2024, but said the closing could be extended to November 9, 2024 or February 9, 2025. Tempur and Mattress Firm also offered to divest retail stores "representing, in the aggregate, not greater than $400 million of annual revenue based on the 12-month period ending on March 28, 2023, as may be necessary to procure such clearance." According to Tempur, Mattress Firm operated 2,329 stores at the end of March 2023 and Tempur operated 227 units.
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Century 21 NYC (formerly Century 21 Department Stores) reopened on May 16 its flagship location near Wall Street in Manhattan, NY. The Company had filed for bankruptcy in September 2020 having struggled to emerge from the city’s pandemic-related shutdown; at the time, it was experiencing just 25% of its regular store traffic. Insurers refused to pay $175 million in claims stemming from the shutdown, leading to the Chapter 11 filing and the closure of its 13 locations. Century 21 teamed up with retail operator Legends for its reopening, offering men’s, women’s, and children’s designer apparel, footwear, outerwear, handbags, accessories, and fragrances. The new store has a smaller footprint than the original one, 100,000 square feet compared to 250,000 square feet, and offers a more limited supply. It no longer has home or beauty departments. The remaining real estate from the previous store has been leased to other tenants.
Starting this spring, Five Below is opening seven outlet stores in Simon Premium Outlet centers. The Company opened its first outlet location last summer in Pearl, MS. This spring’s outlet openings are in Albertville, MN; Pleasant Prairie, WI; Johnson Creek, WI; Gaffney, SC; Edinburgh, IN; Pismo Beach, CA; Tannersville, PA. In addition, Five Below is opening stores in Milpitas, CA and Duluth, MN. The Company plans to open 225 – 250 new stores this year, on top of 150 opened in FY22. Five Below aims to increase its store count to 3,500 by the end of FY30, up from 1,340 at FYE22.
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Walmart is closing a location, a Neighborhood Market, in Overland Park, KS on June 2; the pharmacy at the store will close a week earlier on May 26. More than 20 other Walmart units will continue to operate in the region.
Hy-Vee plans to open its first three stores in Tennessee. The first is slated to open in Spring Hill, a 168,000 squarefoot grocery store and a 4,500 square-foot convenience store with eight gas pumps. The second will be built on the southwest side of Murfreesboro and will be 116,000 square feet with a 6,000 square-foot convenience store. The third will be built on the north side of Murfreesboro and will be bigger at 153,000 square feet, including 10,000 square feet for a liquor store; like the other two it will have a gas station and convenience store. The Tennessee stores will compete with established chains such as JR’s Foodland, Kroger, Walmart, Publix, Aldi, and Sprouts. Publix operates 55 stores in Tennessee, and Kroger has 15 stores in Tennessee.
A landlord is suing Amazon, alleging that the Company is breaking its lease agreement for a planned Amazon Fresh store in Philadelphia, PA. The lawsuit, filed by Federal Realty Investment Trust in March, claims Amazon “has intentionally refused to complete its work, commence operations or pay rent” for a 31,000 square-foot storefront in the Willow Grove Shopping Center. On May 8, Amazon filed a response and counterclaim, denying the landlord’s claims and asserting that it is not obligated to begin paying rent because Federal Realty Investment Trust “has failed to satisfy the landlord work completion date conditions.” At this time, no court hearings have been scheduled and no motion or petition has been filed for the case.
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In the Bed Bath & Beyond, DIP case, the hearing to consider final approval of the DIP Facility, originally scheduled for May 16, was rescheduled for May 31. This is the same day as the Court will consider approval of other first day motions, as well as the motion to set the bar date. Separately, the Court issued an order authorizing the Debtors to reject 476 leases on previously closed stores.
JD Sports opened 230 new stores during FY23, but also closed 167 locations and sold another 75, the latter mainly consisting of Footasylum stores divested in August 2022 as mandated by the CMA, a U.K. regulator. Altogether, JD’s store count declined by net 12 units, representing a 0.4% decline. For FY24, the Company expects to expand its main JD banner by about 100 locations in the U.S. and Canada, including new stores and conversions of existing Finish Line stores. Management plans to open 500 to 600 stores that are mostly expected to be converted, though the Finish Line brand name will remain as an in-store concession within Macy’s department stores.
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Sales at TJX Companies’ home businesses were softer coming off of extraordinary growth during the pandemic. HomeGoods’ 1Q comps fell 7%, while Marmaxx comps rose 5%. During 1Q24, the Company opened 30 new stores, including 24 in the U.S., two in Canada, three in Europe, and one in Australia.
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Boot Barn’s 4Q23 comps were comprised of a retail comp decline of 3.3% and an e-commerce comp decline of 18.4%. The Company opened 12 new stores, bringing its total count to 345. Looking ahead, the Company anticipates opening 52 new stores in FY24, up from 45 in FY23. Comps are expected to decrease 4.5% – 6.5%, with retail comps declining 5.2% – 7% and e-commerce comps down 3% to up 1%
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US Foods’ CHEF’STORE banner is adding three new locations in Roanoke, VA, and Greenville and Fayetteville, NC. The three warehouse format stores will range between 20,000 and 23,500 square feet and will offer a wide assortment of products, from fresh produce, meat, dairy, and beverages to restaurant equipment, catering essentials, janitorial supplies, and other restaurant essentials. With the addition of the three new locations, all slated to open in late Fall 2023, US Foods will have more than 90 CHEF'STORE units across 13 states.
Meijer opened two new supercenters in Northeast Ohio. The two new 159,000 square-foot stores in Warren and Wooster, OH, bring the total number of stores the Company operates in the state to 52; it also has distribution and manufacturing facilities in Tipp City, OH.
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Ross Stores’ 1Q23 results were in line with management’s expectations, with the sales increase driven by strength in cosmetics and accessories, while higher incentive compensation and increased store wages pushed EBITDA down. The Company opened 19 net new stores, bringing its total store count to 2,015. It also plans to open about 100 stores during the year (75 Ross and 25 dd's) while closing or relocating 10.
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Bath & Body Works’ 1Q23 sales were down 2% at U.S. and Canadian stores, as e-commerce sales fell 12% (representing 20% of total sales). During the quarter the Company opened 16 stores and closed eight, ending with 1,810 locations. In FY23, the Company expects to complete 120 real estate projects, including 90 store openings and 30 remodels, partially offset by about 50 closures. In July, the Company will introduce hair care products into 560 stores and online.
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PGA Tour Superstore, which operates 60 stores in 23 states, is expanding its store base by 14% this year. Two stores have opened so far in Boise, IL and Orland Park, IL. Looking ahead, there are locations under construction in Raleigh, NC and Commack, NY, and four more are yet to be announced. The National Golf Foundation has recently highlighted some of the changes the golf industry has undergone in recent years; 40% of new golfers are women, making up a quarter of the golfing population. Last year, 3.3 million people began playing golf for the first time, the third consecutive year that the number has surpassed three million. Over the last three years, rounds of golf played in the U.S. increased 15%.
The Nutley Park, NJ ShopRite will be acquiring the Kearny ShopRite from the Tully family. The planned sale of the Kearny store, along with Tully ShopRite Liquors, to new owners comes as longtime operator Richard Tully retires from the supermarket business. The Tully family opened their first grocery store in Kearny in 1938 and joined the Wakefern cooperative in 1948, just two years after it was formed. The ShopRite of Nutley is owned by the LoCurcio family, which also owns a second store, the ShopRite of Belleville, NJ. The acquisition is expected to be completed in June 2023.
In other banner news, last week, ShopRite opened new Fresh to Table concepts in-store shops at two more Klein’s Family Markets locations in Riverside and Howard Park, MD; the concept offers ready-to-cook fresh items and ready-to-heat/ready-to-eat meals and is already in operation at four other Klein’s Family Markets in Maryland. Additionally, Zallie Family Markets, a family-owned and operated South Jersey-based company, reopened its Glassboro ShopRite store in New Jersey on April 30. The remodeled ShopRite is part of Zallie Family Markets’ major capital expenditures this year.
New York State Senator Liz Krueger and Assemblywoman Pamela Hunter unveiled a proposal to allow New York supermarkets to sell wine. Currently, wine is only available via liquor stores or a winery in New York. There are 40 other states that already allow wine sales in grocery stores. A recent Siena College poll found that 76% of New York voters support this bill. If the bill becomes law and all grocers decide to participate, an estimated 1,900 wine licenses would be issued in the state. However, liquor stores are concerned about the loss of business, as many are anchored by supermarkets.
Jack in the Box signed a 22-unit commitment in four northern Mexican states. This marks the first franchise agreement in Mexico in over 30 years. As part of the Del Taco refranchising initiative, the Company also announced new development agreements for both Jack in the Box and Del Taco to enter Montana and Wyoming. This is the first time both brands have entered these markets.
GetGo Café + Market, owned by Giant Eagle, opened a 5,500 square-foot c-store and gas station in Mars, PA on May 18, bringing its store count to 270. The location includes a full kitchen that specializes in made-to-order meals, sandwiches, wraps, and snacks.
The Container Store’s retail sales declined 14.3% to $245.5 million, and Elfa third-party sales decreased 25.3% to $14.2 million. During the quarter, the Company opened two new stores, one in Salem, NJ and the other in Thousand Oaks, CA, bringing its store base to 97.
1Q23 comps at Foot Locker were down 12.8% with declines at all banners, including 5.5% at Foot Locker, 7.7% at Kids Foot Locker, 3.4% at WSS, and a severe 24.6% drop at Champs Sports, which management partly attributed to its repositioning of the Champs banner to focus on athletic wear and differentiate it from Foot Locker. The Company expects to close about 125 Champs locations during FY23 as part of its larger plan to close 400 mall-based locations through 2026.
Primark unveiled a newly designed U.S. website that follows a similar launch in the U.K. last year. While customers can now browse the Company’s full assortment, the site is still not e-commerce enabled. The Company said this is an intentional move to drive customers to its stores. Customers can, however, check stock availability and sizes in their local “virtual” Primark store. Meanwhile, the Company continues to expand its physical store base. In February, it announced plans to open a 54,000 square-foot store in Elmhurst, Queens, NY, its 17th location in the U.S. Primark aims to reach 60 stores nationwide, and 530 globally, by 2026.
Wendy’s announced a partnership with hyperlogistics company Pipedream to use an underground autonomous robotic system to transfer orders, within seconds, from the kitchen to an Instant Pickup portal beside designated parking spaces. The Company said it will be the first quick-service restaurant to pilot this technology. The first underground delivery system will be added to an existing store later in 2023, though the Company did not indicate where.
Fareway opened its 135th location in Clive, IA. The 24,000 square-foot store features a full-service butcher, locally sourced items, and a variety of wine, craft beers, and spirits, and offers self-service checkout and online ordering with curbside pickup.
Cato's 1Q23 sales fell 7% as inflationary pressures led lower income customers to reduce discretionary spending. Cato has been challenged with late product arrivals due to supply chain issues. During the quarter, the Company opened four stores and permanently closed 20 locations, ending with 1,264 stores in 32 states.
L.L. Bean expects to complete its new 390,000 square-foot corporate headquarters in Freeport, ME on June 15, 2023, marking the close to an eight-year, $110 million project. The Company began employing workers there in December 2022.
Metro opened a 32,000 square-foot Food Basics in Port Elgin, ON, Canada. Food Basics offers private label products as well as locally sourced items and fresh meat and produce. There are more than 125 Food Basics stores across Ontario.
CTown Supermarkets, which are mainly supplied by Krasdale Foods, opened a new location in New Haven, CT, under the collaborative banner The Meat King by CTown. The 16,000 square-foot store offers a variety of meats, grocery, produce, dairy, frozen and deli products and is part of the grocery chain’s ongoing expansion outside of the traditional metro New York area. Currently, CTown operates more than 140 locations in the Northeast region.
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