Openings, Closings, & Other Key Industry Highlights

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November 17, 2021


Restaurant Brands International (RBI) announced the acquisition of Firehouse Restaurant Group Inc. (dba Firehouse Subs) for $1 billion, which will be funded through a combination of cash and debt. As of September 30, RBI had $1.77 billion in cash on hand and near full availability under a $1 billion revolver. RBI anticipates the deal will close in the next few months, with Firehouse being immediately accretive to earnings and cash flow. Firehouse’s 97% franchised store network consists of 1,203 locations in the U.S. (1,142), Canada (47), and Puerto Rico (14), with the strongest concentrations in Texas and the Southeast. Click here for more info.


Grocery Outlet saw mixed 3Q results. Comps were off more than 4%, and EBITDA fell 6% from 3Q20 due to lapping the pandemic effect in the prior year; however, these metrics were up 5% and 18%, respectively from 3Q19. Looking forward, the Company expects 4Q comps of -2.5% to -3.5%. Grocery Outlet continues to add stores, opening seven in the quarter, and 28 in the year-to-date period; thus, despite the comps, net sales were up 0.6%. Additionally, on November 9, the Board approved a new $100 million share repurchase plan. Liquidity of more than $250 million remains sufficient to support continued new store growth and share repurchase plans. Click here for a list of future openings.

Our Hot Market Report takes a closer look at the Miami, FL 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.


Last week, Amazon opened two new Maryland delivery stations in Landover (172,000 square feet) and Laurel (150,000 square feet), following a new 264,000 square-foot Beltsville location that opened in late October. In other news, Amazon plans to open a 300,000 square-foot facility in North Carolina Commerce Park in Wilson, NC.

A group of Amazon workers in New York City’s Staten Island have withdrawn a petition to hold a union election, marking a setback in a growing push by organized labor to unionize.


Through its partnership with Gatik, Walmart is doing driverless deliveries in Bentonville, AR.Gatik’s fleet of autonomous delivery trucks operate daily without a safety driver behind the wheel. The route moves customer orders between a Walmart dark store (used for the fulfillment of online orders) to its small-format Neighborhood Market grocery format, where customers pick up their orders. This marks the first time an autonomous trucking company has removed the safety driver from a commercial delivery route on the middle mile anywhere in the world, according to the companies.

After announcing plans for a new 720,000 square-foot high-tech distribution center in Lyman, SC earlier this month, Walmart says it plans to build two more in the Dallas-Fort Worth, TX area. The project in Lancaster, TX includes a 1.5 million square-foot automated fulfillment center slated to open in 2023 and a 730,000 square-foot automated grocery DC due to open in 2024. Once in operation, the automated facilities will move more than two times the volume of traditional fulfillment and grocery DCs, as well as improve the accuracy, quality and speed of the fulfillment and distribution of products. Overall, Walmart operates 19 DCs and 593 stores in Texas.

Click here for a sample list of openings and closings.


Members of the Wakefern cooperative recently opened a pair of new ShopRite supermarkets a week apart in Matamoras, PA and Wayne, NY. The 73,000 square-foot Matamoras store was opened by Shop-Rite Supermarkets Inc. (SRS), which has 36 ShopRite stores in New Jersey as well as the Hudson Valley and Capital Region in New York. It replaced the ShopRite of Montague at the Tri-State Mall. The 80,000 square-foot Wayne store replaced a nearby store and is owned by Inserra Supermarkets, which operates 23 ShopRite stores including 18 in New Jersey’s Bergen, Hudson and Passaic counties and five in New York’s Rockland County. Click here for a sample list of openings and closings.


Sally Beauty Holdings reported strong top-line growth in 4Q21, as traffic remained suppressed, but average units per transaction and average ticket increased. Sales for the quarter rose 3.4% to $990 million. Despite 127 net store closures in the last 12 months (104 Sally Beauty Supply (SBS) and 23 Beauty Systems Group (BSG), FY21 sales jumped 10.3% from the prior year. Lower margins coupled with increased labor and advertising costs contributed to a 2.2% decline in Company-provided EBITDA to $143.4 million; EBITDA margin was down 80 bps to 14.5%. Management indicated plans to close another 50 locations in FY22. Turning to the balance sheet, during the last 12 months the Company used excess cash to repay $418 million of debt, ending the year with $1.38 billion in debt, down 23% from the previous year. At the end of FY21, liquidity totaled $901 million, consisting of $401 million in cash and full revolver availability of $500 million. The Company has no long-term debt maturities until FY24. 

Click here to request a copy of this Special Analysis.


Walgreens Boots Alliance and VillageMD announced plans to open 20 new Village Medical at Walgreens primary care practices in the Tampa, FL area and more than 20 of the practices in the Dallas, TX area over the next year. The first Village Medical at Walgreens in both metro markets opened on October 26; the Company is planning several more in Dallas through the end of calendar 2021 and Tampa in early 2022. The openings represent expansion into the Company’s second major market in Florida, following Orlando, which will have 10 locations by the end of 2021, and the fourth major market in Texas, following Houston, El Paso and Austin. Click here for a complimentary list of future openings and closings.


Indigo’s revenue increased 16.3% to C$238.8 million during 2Q22, driven by omnichannel strength and online growth of 85% during the period. Retail traffic remained challenged, but management noted that customers continued to show a positive response to Company offerings, particularly to its proprietary brands OUI (home) and Nota (paper). Ultimately, EBITDA stood at C$10.6 million for the quarter, versus a loss of C$11.3 million in 2Q21, reflecting lower COVID-19 labor support for home and field leadership and the sales leveraging of fixed costs. As part of its newly renegotiated partnership with Starbucks, moving forward 36 cafés will continue to operate as Starbucks within Indigo stores, while the remaining cafés, which have been closed throughout the course of the COVID-19 pandemic, are slated to be remodeled under the evolving Indigo brand retail experience. 


Captain D’s said it has experienced a surge in franchise development throughout 2021, reporting that 18 new agreements have been signed to develop 43 locations in key markets across the U.S. over the next several years. Half of the agreements are with existing franchisees. Click here for a list of future openings.

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Xponential Fitness reported 60% revenue growth for its 3Q ended September 30. Sequentially, the top line improved 14%. North America system-wide sales were up 93% (five consecutive quarters of growth), with comps up 65% over the prior-year period. Overall, 3Q21 EBITDA totaled $7 million, up from $1.5 million in 3Q20. As of September 30, the Company had $26 million in cash and $94 million in total debt, and has generated $4 million in YTD operating cash flow. During the quarter, the Company opened 68 new studios, increasing total studio count to 1,906 heading into 4Q. In October 2021, the Company acquired its 10th brand, BFT, for $44 million. Xponential entered into a $38 million term loan to help finance the purchase. BFT has about 130 franchised clubs, primarily in Australia, New Zealand, and Singapore. 


USR Parent, Inc. (Staples’ retail unit, which is controlled by Sycamore Partners) reaffirmed its proposal to acquire The ODP Corporation’s retail/consumer business for $1 billion in cash. The proposal was formally delivered to ODP on June 4 and remains unchanged. We note that the entire office supply industry has struggled operationally; the pandemic has accelerated the ongoing drop in demand for products, while competition from Amazon has increased. The slow pace of store closings at both Staples and ODP was a chronic problem since before the failed attempt to merge seven years ago. Operational complications have intensified the need to cut costs and address store overlap. Therefore, we anticipate significant closings of underperforming stores upon completion of the merger transaction. It is not yet clear whether financing for the transaction would be taken on by Staples or another entity controlled by Sycamore. We also note that the proposal does not address either Staples’ or ODP’s B2B units, which would ostensibly remain competitors if a merger between the retail units is ultimately consummated. Click here for more info.


Skogen’s Festival Foods announced that new stores in Wausau, Stevens Point and Weston, WI will open by December 10. The stores were formerly owned by T.A. Solberg Co. and operated under the Trig’s banner. With the addition of the three new locations, Skogen’s Festival Foods will operate 39 full-service supermarkets in Wisconsin.


Pacific Bells LLC, one of the largest Taco Bell franchise operators, has been acquired by investment firm Orangewood Partners. Financial terms were not disclosed. Under the deal, Pacific Bells’ Founder and CEO Tom Cook, and others on the management team, will retain a significant minority stake and continue to operate the restaurants. Pacific Bells was founded in 1986 in Oregon and has since grown to include more than 250 Taco Bell locations in nine states: Alabama, Arkansas, California, Mississippi, Ohio, Oregon, Tennessee, Washington and Wisconsin. Click here for a list of future openings.


Sweetgreen announced on November 9 that it has launched its IPO of its Class A common stock. The Company is offering 12.5 million shares with the IPO price expected to be between $23 and $25 per share. Sweetgreen has applied to list its stock on the NYSE under the symbol SG. Founded in 2007 and based in Los Angeles, CA, Sweetgreen currently has more than 140 restaurants in the U.S. Click here for more info.


On October 2, Scheels opened an 110,000 square-foot All Sports Store in Missoula, MT, featuring mini bowling, an arcade, a putting green, an archery lane, and a café. This brings the Company’s store count to 30. As we previously reported, two other stores are scheduled to open in 2023 in Wichita, KS and Chandler, AZ, representing its 31st and 32nd stores. In spring 2024, the Company plans to open a 240,000 square-foot store in Meridian, ID, featuring a Ferris wheel, aquarium, wildlife mountain, candy shop, arcade, sports simulators, and a café, bringing its store count to 33. Click here for a sample list of future openings.


Advance Auto Parts3Q21 sales increased 3.1% to $2.62 billion; comps were up 3.1%, or 13.3% on a two-year stack basis. Adjusted gross margin improved 246 bps to 46.2% due to strategic pricing, sourcing, and expansion of private label brands. SG&A margin eroded 209 bps to 35.8% due to inflationary headwinds and startup costs for new store openings. As a result, operating income declined 10.8% to $229.2 million. Looking ahead, Advance Auto Parts now expects FY21 sales of $10.90 billion – $10.95 billion, up from prior guidance of $10.60 billion – $10.80 billion. Comps are projected to rise 9.5% – 10% from 6% – 8%. Meanwhile, the Company reduced its guidance for new store openings to a minimum of 30, down from 80 – 120, as the construction environment in California remains challenging due to the ongoing pandemic. Advance remains committed to converting 109 Pep Boys locations in California to Advance Auto Parts, as announced in March 2021. Click here for a a list of future openings.


Casper Sleep announced that it has agreed to be acquired by private-equity firm Durational Capital Management approximately $286 million, or $6.90 per share based on the Company’s 41.5 million shares outstanding at the end of 2Q21. Durational has obtained committed debt financing from KKR Credit and Callodine Commercial Finance, LLC. The deal requires stockholder approval; officers, directors, and affiliated investors holding an aggregate of 28% of Casper’s outstanding shares have agreed to vote in favor of it. The transaction is expected to close in 1Q22, after which Casper will operate as a privately held company.


Primark announced plans to accelerate its expansion pace in the U.S. over the next five years, expecting to grow its current base of 13 locations to about 60. This represents a pace of nine or 10 new stores per year. The chain currently has six signed leases in the U.S., including five in New York and one in Virginia. The New York locations are set to open in Brooklyn, Queens, Long Island (2), and Albany; in Virginia, a Tysons Corner store lease was signed earlier this year. Founded in Ireland in 1969 and owned by Associated British Foods, Primark made its U.S. debut in 2015 in Boston, MA and opened its 13th location in September in Philadelphia, PA. For the year ended September 18, comparable sales grew 6% compared to the same period in 2019.

In conjunction with the expansion plans, Primark appointed Kevin Tulip as president of its U.S. operations; most recently, Mr. Tulip led the Company’s Benelux business. Former President Andy Stewart was appointed director of business development, a newly created role.

Over the next five years, Primark expects to grow its global store base to 530 stores, up from 395 locations in 14 countries. Outside of the U.S., the chain intends to expand in France, Italy, Iberia, Slovakia, and Poland. Click here for a a list of future U.S. openings.


The Home Depot’s 3Q21 sales increased nearly 10% to $36.82 billion; comps were up 6.1%, or 5.5% in the U.S. The Company’s customer transactions fell 5.5%, but customers were spending more when they did visit, raising the average ticket by 12.9%. Operating income improved nearly 20% to $5.80 billion. The Company ended the quarter with 2,317 units in North America, including 14 added through an acquisition during 2Q21.Click here for a a list of future openings.