July 26, 2023
LIDL U.S. CEO Michal Lagunionek will step down in four weeks from the role that he has held since April 2021. Joel Rapoldt, partner and managing director at consulting firm AlixPartners, will replace Lagunionek, making him the fourth person to assume the top role since the U.S. chain launched in 2017. Rampoldt is filling the top spot in Lidl U.S. without any prior experience at Lidl. It is believed that Lagunionek will train Rampoldt before returning to Europe.
This is the latest in a series of unexpected developments at Lidl. In February, the Company laid off some 200 corporate employees, and in July, closed 11 stores in North Carolina, Virginia, New Jersey, South Carolina, Maryland, and Pennsylvania. In each instance, the Company reiterated its commitment to expansion in the U.S.
In other news, Lidl confirmed on July 16 that it closed 11 stores in North Carolina, Virginia, New Jersey, South Carolina, Maryland, and Pennsylvania. This is up from the five closures announced the prior week. Following the closures, Lidl has roughly 170 stores in the U.S., with more stores slated to open across the East Coast. Management noted that three stores were opened in North Carolina and Washington D.C. last month, and a new store is opening this week in Lorton, VA.
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H-E-B opened a store in McKinney, TX, marking its third store in the Dallas-Fort Worth area. The 118,000 square-foot locations joins H-E-B units in Frisco and Plano, and six Central Market locations.
METRO'S discount banner Food Basics opened a new 32,000 square-foot store in Oakville, ON, Canada on July 20. This is the chain's third in Oakville and 144th overall.
In other news, Metro reached a tentative agreement with Unifor, averting the strike of 3,700 frontline grocery workers in the greater Toronto area. The bargaining process began on June 26 and the agreement was reached the night before workers were set to strike.
In the DAVID'S BRIDAL, DIP case, David's Bridal closed its transaction with CION Investment Corporation for the sale of substantially all of the Company's assets. The Company will continue operations at up to 195 stores across the U.S. CION has invested $20 million into the new business to fund future growth and has assumed certain bankruptcy-related liabilities. Additionally, Bank of America will continue to provide financing to enhance the business' financial flexibility through a $50 million revolving credit facility and a $20 million term loan facility. The Company operated 294 stores on the petition date, including 278 stores in the U.S., 12 in Canada, and four in the U.K. According to its website, CION is a publicly-listed business development company that "focuses on the senior secured debt of U.S. middle market companies."
Separately, the Court issued an order authorizing the rejection of 102 additional unexpired leases.
In the BED BATH & BEYOND, DIP case, the Debtors provided a list of 20 successful bidders and backup bidders in the auction of 68 Phase 2 leases. A hearing to approve the sales is scheduled for July 28.
J.C. PENNEY opened its renovated corporate offices in Plano, TX, bringing back more than 2,000 associates to the 320,000 square-foot campus, now called CALWest. The Company said the reopening is part of its effort to enhance the employee experience and remain a visible leader in the local business community.
CVS HEALTH is closing a store in Harlingen, TX on August 15 and a store in Roseville, CA on August 16. In addition, a Brookfield, IL location closed on July 20. The Company announced in November 2021 that it would be closing 900 locations by 2024 due to a decline in sales and a rise in online shopping.
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PACSUN opened a 1,500 square-foot store at Mall of America in Bloomington, MN dedicated to activewear. The store is called PAC1980 after the year the Company was founded. The Company aims to expand dedicated PAC1980 spaces in the future. The PAC1980 collection was launched earlier this year and was recently rolled out to all existing location.
FULLBEAUTY BRANDS acquired size-inclusive intimates brand Cuup. Terms of the deal were not disclosed. Cuup will be added to FullBeauty's digital mall by the fall, which currently features other brands such as Eloquii, June+Vie, and Swimsuits for All. Insights and data from Cuup will enable the Company to better inform how it designs its new digital mall. The transaction allows the Company to continue its growth in the intimates category with a focus on reaching a new customer demographic.
AMAZON'S palm-scanning payment technology, Amazon One, will be implemented at all Whole Foods stores by year end. It was first launched in select Whole Foods locations in 2020, and it is currently available at 200 Whole Foods stores and 200 other retail outlets.
In other news, Amazon is now offering online orders in Puerto Rico to be delivered to a pickup hub. The Company is using a location leased and operated by Ocean Drive Logistics located in San Juan. Home delivery will continue to be available in addition to the pickup location.
FITNESS INTERNATIONAL, the operator of LA Fitness and City Sports Clubs, signed a lease for a 48,000 square-foot store in Santa Monica, CA that will be a Club Studio. The location will be on the first level of the former Bloomingdale's space at Santa Monica Center. Two other Club Studio's in California are located in Long Beach and Irvine.
KROGER will accept Mark Cuban's Cost Plus Drug's TeamCubanCard at its pharmacies around the country. Cost Plus can help lower the cost of prescription drugs, particularly cash paying customers or those with high deductibles. There were also reports that Cost Plus will begin selling drugs directly to hospitals and clinics this fall.
Meanwhile, in an update on the Kroger/Albertsons proposed merger, the FTC and DOJ recently released revised Merger Guidelines which "describe and guide" the agencies' evaluation of mergers, but do not themselves create binding law. Building upon previous guidelines, the draft guidelines significantly lower the thresholds for determining market concentration levels sufficient to create a presumption of anticompetitive effects. The National Grocers Association commented on the updated guidelines saying, "NGA is pleased to see federal antitrust enforcers take seriously the competitive concerns that arise when dominant firms abuse their buyer power to impose discriminatory terms on their rivals." The FTC and DOJ have asked the public to review the draft and provide feedback through a public comment period that will last 60 days.
In other news, Kroger announced that in the first year of its paid membership program, Boost by Kroger Plus, members saved more than $115 million. The Company is currently offering a special anniversary offer between July 19 and August 8 for new members who enroll to receive 1,000 bonus fuel points. Boost benefits include free delivery, fuel points, and member exclusives.
LOWE'S COMPANIES is expanding its PETCO in-store concept from 15 locations to nearly 300 stores by year end. Lowe's Petco in-store shops carry a range of products from nutrition and supplies to flea and tick solutions. Products include Petco private brands and national brands. Petco's Vetco Clinics, which offer vaccinations, microchipping, and preventative medicine, will also be available once a month at 75 Lowe's stores and will be staffed by a licensed veterinarian. The expansion of the Petco in-store shops is part of Lowe's broader rural strategy to tailor its assortment in up to 300 stores to include feed, pet, outdoor products, and apparel.
ASHLEY HOMESTORE announced plans to refresh its stores nationwide to reflect its modernized look and feel. The Company initiated a rebrand last year with a new logo and name change from Ashley HomeStore to Ashley. The first stores to undergo the refresh are located in Atlanta, Los Angeles, Orlando, Salt Lake City, and Tampa. Updated features include on-trend designs, open-concept updated mattress gallery, and interior design elements. The rebranding efforts are aims to attract a younger demographic of customers who are looking for an upscale and on-trend look at an affordable price point. The Company recently introduced new lower price points as part of the larger rebrand.
In the PARTY CITY, DIP case, the Debtors filed an amended Plan of Reorganization and a supplemental Disclosure Statement. The Debtors also filed a Form 8-K, which noted their concerns over their ability to successfully complete the reorganization, stating, "there can be no assurance that the amended Plan will be approved by the Bankruptcy Court or that the Debtors will be successful in consummating the Restructuring or any other similar transaction on the terms set forth in the amended Plan, on different terms, or at all."
CHIPOTLE signed its first development agreement to open restaurants in the Middle East. In partnership with international franchise retail operator Alshaya Group, the Company will initially open new restaurants in Dubai and Kuwait early next year before expanding further across the region. Chipotle's existing international portfolio of owned restaurants includes 33 locations in Canada, 14 in the U.K. (with three more opening this summer), six in France, and two in Germany.
POTBELLY finalized a 27-store agreement in Maryland with its founder Bryant Keil and his son Hampden. The agreement grants Keil exclusive territory rights in seven Maryland counties, Washington, Frederick, Montgomery, Prince George, Charles, Calvert, and St. Mary's, to develop 15 new Potbelly locations in the next eight years. Additionally, Potbelly will refranchise 12 existing restaurant locations as part of the transaction.
DUCK DONUTS announced the signing of several franchise agreements during 2Q23, securing 11 franchise deals for a total of 20 stores and one food trailer. Two of the deals include international area development agreements, with two franchisees bringing four shops to Northern Ireland (first European locations) and five locations throughout the Caribbean (Aruba, Bonaire, Curacao, and St. Marteen). In the U.S., Duck Donuts franchise partners have signed on in Milford, CT; S. Riverview, FL; Athens, GA; Chicago and Hawthorn Woods, IL; Robbinsville, NJ; Newtown, PA; Gainesville, VA; and Madison, WI.
