The week's top stories...Blue Apron and Chico's are acquired, Toys 'R' Us is coming back, and Target and Dick's close stores
October 4, 2023
TOYS 'R' US plans to open new stores in the U.S., "marking a return to dedicated bricks-and-mortar locations," following its bankruptcy in 2017. Parent company WHP Global said it will open the new stores in 2024, with 24 new flagship stores, and a separate rollout at airports and on cruise ships. The first store is set to open in time for the holiday season inside Dallas/Fort Worth International Airport. The Company plans to roll out the locations in "prime cities that complement its current retail footprint."
Toys 'R' Us currently operates one flagship location (20,000 square feet) at American Dream mall in New Jersey, as well as in over 400 Macy's stores, but it has no significant dedicated retail presence around the U.S.
The new stores are a partnership with Go! Retail Group, which characterizes itself as a family of brands comprised of Calendars.com, Calendar Club, Go! Toys & Games, Attic Salt, NIQUEA.D, Snoozimals, and Kobioto.
CHICO'S agreed to be acquired by private equity firm Sycamore Partners. Under the terms of the agreement, Chico's shareholders will receive $7.60 per share in cash, representing a 65% premium to the Company's closing stock price on September 27. The deal, which was approved unanimously by the board, values Chico's at about $1 billion including debt and is expected to close by the end of 1Q24. Upon completion of the transaction, Chico's FAS will become a privately held company.
The agreement includes a 30-day "go-shop" period that will expire on October 27, which permits Chico's FAS and its financial advisor to actively solicit and consider alternative acquisition proposals.
TARGET announced it is closing nine stores across four states, citing increased violence related to theft and organized retail crime. The closures include three stores in Portland, OR, two in Seattle, WA, three in San Francisco, CA, and one in New York. The Company said it will continue to make "significant investments" to keep the rest of its 150 stores in those markets, and the nearly 2,000 stores in total nationwide, safe. In May 2023, CEO Brian Cornell indicated that shrinkage would be about $500 million higher than 2022, putting the total at about $1.30 billion.
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WAWA plans to open 60 stores in Ohio, 60 stores in Indiana, and 40 stores across Kentucky over the next eight to 10 years, with construction to begin in mid-2024 and the first openings projected for mid-2025. In Ohio, 16 sites are under contract so far across Butler, Clermont, Clinton, Greene, Hamilton, Miami, Montgomery, and Warren Counties. In Indiana, 16 sites are under contract in Clark, Dearborn, Delaware, Hamilton, Hancock, Hendricks, Johnson, Madison, Marion, and Wayne Counties. In Kentucky, 15 sites are under contract in Boone, Bullitt, Fayette, Hardin, Jefferson, Jessamine, Oldham, Scott, Shelby, and Warren Counties. All of these projected stores are currently making their way through the permitting and approval process. To build each store, Wawa will invest about $7 million.
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GELSON'S, which operates 27 grocery stores in Southern California, is partnering with electric vehicle-charging station developer Rove to provide food and beverage services at its new charging stations. Rove plans to build six locations in Southern California beginning this year, with 20 stations planned by 2026. The new concept, called ReCharge by Gelson's, will offer beverages, hot and cold snack and meal options such as poke bowls and sushi, sandwiches and wraps, salads, charcuterie, and cheese plates. A selection of dairy and frozen items will also be features, along with staples such as snack foods, bread, and non-grocery items.
Meanwhile, this month Gelson's will open its 28th store at the West Edge development in Los Angeles, CA.
NORDSTROM will open a 24,000 square-foot Nordstrom Rack at the Gardiner Manor Mall in Bay Shore, NY in Spring 2024. With the addition of this location, Nordstrom will operate 12 Rack stores, three full-line stores, and two Locals in New York.
In addition, Nordstrom Rack will open a 30,000 square-foot location at Deerfield Towne Center in Mason, OH in Fall 2024, bringing its Ohio store count to eight Rack and three full-line stores.
Nordstrom Rack will open a 26,000 square-foot store at Clairemont Town Square in San Diego, CA in Fall 2024. With the addition of this new location and 10 other already announced future openings, Nordstrom will operate 68 Rack stores, 22 full-line units, five Locals, and one asos in California.
Other previously announced 2024 openings include Queen Creek, AZ; Snellville, GA; Wheaton, IL, Jacksonville Beach, FL; Elk Grove, Gilroy, Oceanside, and San Mateo, CA; and Macedonia, OH.
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DICK'S SPORTING GOODS will close 11 of its 15 Moosejaw stores along with Moosejaw's headquarters in Madison Heights, MI, effective February 2024. Dick's had acquired the digitally native specialty outdoor retailer from Walmart earlier this year for an undisclosed price. The Company stated that it will consolidate Moosejaw into Public Lands, which is based in Pittsburgh, PA. It will continue to sell products on Moosejaw.com and PublicLands.com. The 11 Moosejaw stores closing include seven in Michigan as well as locations in Olathe, KS; Chicago, IL; Boulder, CO; and Kansas City, MO. Locations in Birmingham, MI; Salt Lake City, UT, and Bentonville, AR will remain open. Public Lands opened four new stores in November 2022, bringing its store count to seven locations. Meanwhile, Dick's House of Sport concept plans to open 20 locations over the next two years, with the aim to operate 75 to 100 stores by 2027.
OLLIE'S BARGAIN OUTLET HOLDINGS is building a 615,000 square-foot distribution center in Princeton, IL, scheduled to open in 2024. The facility will be Ollie's first DC in the Midwest and will provide the capacity to service an additional 150 to 175 stores in that region. The facility will support the Company's nationwide expansion efforts to open more than 1,050 stores and will enable it to enter new states in the Midwest.
BLUE APRON agreed to be acquired by Wonder Group, the food-delivery startup led by former Walmart executive Marc Lore, for $103 million in cash. The cash tender offer for all of the Company's common stock at $13 per share, represents a 137% premium to the September 28 closing price and a 77% premium to the 3-day volume weighted average price of the Company's common stock. The deal is expected to close in 4Q23.
RH expressed disappointment that its proposal for the public property at One Ocean Drive, Miami Beach, FL was not recommended for selection. In an open letter to the City of Miami Beach, RH said its proposal included an investment of $150 - $170 million of site improvements, over $50 million of public benefits, a minimum guaranteed rent of $333 million to the City (which it said was 1.75x to 2.8x greater than the other proposals), a $6 million upfront payment (which it said was the only true upfront payment not being credited to future rent), annual tax revenue of $1.65 million in year one, and a net positive economic impact of nearly $500 million. The Company suggested that ongoing litigation, upcoming elections, and the fact that the current operator has 2.5 years left on their lease, the final outcome may remain uncertain for some time.
BED BATH & BEYOND, DIP provided notice that the Plan of Liquidation became effective on September 29.
Early last week, CVS HEALTH pharmacists at 22 stores in Kansas City, MO walked out in protest of workplace conditions, leading to the temporary closure of those locations. CVS issued an apology for not acting sooner and stated, "We're committed to addressing concerns that have been raised by our pharmacists and are developing a sustainable, scalable action plan that can be put in place in any market where support may be needed." The stores' online vaccination appointment schedulers have been temporarily suspended, and pharmacists can now cancel vaccination appointments without facing repercussions. While a deal is on the table and pharmacists are back at work, the deal does not outline exactly how new employees will be hired and trained, which pharmacists say is still a concern.
Quarterly Earnings
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