July 12, 2023
Lidl will be closing five stores in four states, in each instance citing underperformance as the reason the locations are being shuttered. Stores in Short Pump and Charlottesville, VA, North Augusta, SC; Howell, NJ; and Thomasville, NC are all expected to close on or about July 16. We note that while the store in Howell, NJ is being closed, a new Lidl location in nearby Freehold is slated to open in the near future. A Company spokesperson said that Lidl made a “strategic decision” to close the locations and focus on areas that are seeing significant growth.
We also note that to support future expansion, Lidl has been augmenting its supply chain infrastructure, building distribution facilities along the East Coast, each capable of supporting between 300 and 400 stores when fully operational. The Company’s third facility opened in April 2020 in Perryville, MD, midway between Washington D.C., and Philadelphia; the 705,000-square-foot facility is the Company’s smallest. Lidl’s other DCs are in Fredericksburg, VA (919,000 square feet), and Mebane, NC (850,000 square feet).
A fourth facility, the Company’s largest at 925,000 square feet, will be located in Covington, GA, about 35 miles southeast of Atlanta. However, this DC, representing an investment of about $100 million, has been plagued by delays due to supply chain issues and is now expected to be operational by late 2023 or early 2024. The new DC will allow Lidl to continue its expansion to the south, particularly in Georgia. A fifth DC, slated for the Bucks County, PA area, is currently in the planning stages. As of late June 2023, Lidl was operating about 180 stores in nine states and Washington D.C.; the Company opened two new stores on June 28, one each in Washington D.C. and Greensboro, NC.
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Walgreens will make another round of layoffs and will close an e-commerce distribution center in Edwardsville, Ill., which will eliminate approximately 400 jobs. RetailStat previously reported the Company plans to close 150 stores in the U.S. and 300 in the U.K. as part of a cost-cutting effort that projects at least $800 million in savings in 2024. The Company also completed an organizational restructuring, which included the elimination of more than 500 roles, or about 10% of its corporate and U.S. support office workforce.
In other news, Walgreens will pay $285 million to the State of Nevada over 15 years to settle its alleged role in the country’s opioid crisis. The state reached a $152 million settlement with CVS in May. This case brings the state’s opioid claim total to $1.10 billion. Nevada was one of the states that did not join the larger multi-district-litigation, pursuant to which Walgreens and CVS agreed to pay about $5 billion each. Walgreens was also rumored to be near a $500 million settlement with the state of New Mexico, which also did not join the larger MDL settlement. Walgreens also agreed to pay San Francisco $230 million, and Florida $683 million, while CVS, Walgreens and Walmart agreed to pay a combined $651 million to Ohio’s Lake and Trumbull counties.
In the Bed Bath & Beyond, DIP case, the Debtors cancelled the buy buy Baby going concern auction because they did not receive any bids that were higher or better than the bid for the buy buy Baby IP assets. As we previously reported, Dream on Me Industries, Inc. was selected as the successful bidder for the buy buy Baby IP assets.
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Big Lots has entered into a sale and leaseback agreement with affiliates of Blue Owl Capital relating to the Apple Valley, CA distribution center and 26 owned store locations. The new agreement excludes the Company’s corporate headquarters, which was mentioned in the May 24 letter of intent for a sale. The transaction is expected to generate net proceeds of $310 million (gross proceeds of $318 million) and is scheduled to close within 45 days, subject to customary closing conditions. The Company intends to use $100 million to fully pay down the synthetic lease on the Apple Valley DC, with the remainder to pay down debt on its asset-based lending revolving credit facility.
H-E-B opened a new, 107,000 square-foot store on the former site of the Nutty Brown Café and Ampitheatre in Austin, TX. In addition to the usual grocery essentials, the location features a full-service bakery and tortilleria, expansive produce section, deli, full-service meat and seafood counters, prepared meal area, and wine and beer department with sampling locations. It also features a Texas Backyard section with items for outdoor entertaining and hobbies, a Home by H-E-B department with home décor items, and an H-E-B brand shop with store-themed merchandise. The location also has a drive-thru pharmacy.
In the Christmas Tree Shops, DIP case, going out of business sales have commenced at the Debtors remaining 74 stores. The decision to initiate GOB sales followed notification of default under the DIP Facility and the inability to find a going concern buyer for the Company. The Company’s initial 10 stores were previously set to close by the end of June.
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Sprouts Farmers Market is opening 10 stores in the next two months, including six in Florida and one each in Colorado, Arizona, California, and New Jersey. See the chart below for locations and dates.
Publix announced plans to open a 48,000 square-foot store in Chesapeake, VA in early 2025. Publix opened in nearby Williamsburg, VA and Kill Devil Hills, NC in 2018, and additional stores are in the pipeline for the Virginia cities of Suffolk and Virginia Beach. Publix confirmed in late April plans for a 45,000 square-foot location in Carolina Shores, NC, its third in Brunswick County. The Company also reopened its Fort Myers Beach, FL location in May which had been severely damaged by Hurricane Ian last year, and it plans to open locations this week in Royal Palm Beach, FL and Boiling Springs, SC.
Meanwhile, Publix is preparing for its launch into Kentucky. The Company broke ground on its store in Louisville last summer and expects to open it by 4Q23. Another two locations in Ballardsville and Brownsboro, KY are slated to open in 1Q24.
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In the David’s Bridal, DIP case, the Debtors cancelled the going concern auction for the Company’s assets. On Friday, the Debtors notified the Court that “in accordance with the bidding procedures order, the Debtors selected the going concern bid package submitted by CION Investment Corporation as the successful bidder.” According to its website, CION Investment Corporation (CIC) is a publicly listed business development company (BDC) that “focuses on the senior secured debt of U.S. middle market companies.”
Claire’s, which had filed for an initial public offering (IPO) with the U.S. SEC in 2021, withdrew that application saying it had “decided not to proceed with the offering at this time.”
Alex and Ani is closing 20 stores and its Rhode Island headquarters. This leaves the Company, which previously had more than 100 stores nationwide, with seven locations. The Company closed on a $17.5 million senior secured credit facility to support its working capital needs and business operations in August 2022, and filed for bankruptcy protection in June 2021.
Camping World is acquiring Sonny’s RVs in Casper, WY, with the transaction expected to close in 4Q23. This will bring the Company’s store count in Wyoming to two, joining an existing location in Cheyenne.
Twin Peaks announced its plans to double its footprint by 2027 and surpass the $1 billion sales mark. From 2021 to 2022, the Company grew its footprint by 3.5% and increased sales by 23% year-over-year. Estimated sales per unit have also increased from $4.9 million in 2021 to $5.6 million in 2022.
RaceTrac announced the acquisition of consumer-facing brand Gulf Oil. The Company’s wholesale fuel supply and trading subsidiary, Metroplex Energy, has signed a definitive agreement with Gulf Oil L.P. to acquire Gulf Oil LLC. As part of the transaction, RaceTrac will acquire Gulf’s fuel brand across the United States and U.S. territories and all of Gulf’s branded distributor and license agreements. The financial terms of the deal were not disclosed. The transaction is subject to customary closing conditions and is expected to be completed within 60 to 90 days.
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