July 5, 2023
Cardenas Markets, LLC has acquired El Rancho Supermercado, a Texas-based grocery chain with 28 locations; details were not disclosed. Cardenas plans to continue to operate the stores under the El Rancho banner, which joins its existing Cardenas (57 stores), Tony's Fresh Market (21), and Los Altos Ranch Market (seven) banners. Altogether, the Company has increased its store count from 85 to 113. Each of the Company's banners operates in a different geographic area, with Cardenas in California and Nevada, Tony's in Illinois, Los Altos in Arizona, and now El Rancho in Texas and Kansas. The Company previously acquired the six-store Rio Ranch Market chain in Southern California in June 2022, and gradually re-bannered those stores to the Cardenas brand.
Walgreens 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.
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In the Bed Bath & Beyond case, the Debtors selected the successful bidders and backup bidders with regard to the Phase 1 auction of leases, including 107 stores and two DCs. The total amount of the successful bids was $36 million, including a bid by Burlington Coat Factory Warehouse Corporation for 44 of the locations for $12 million.
In a separate and unrelated order, the Court approved the Debtors’ motion (filed June 7) to sell six unexpired leases to Burlington Coat Factory for $1.5 million. The Court approved the sale of the Company’s IP assets including the brand name, intellectual property and e-commerce platform to Overstock.com for $21.5 million. The transaction does not include any stores.
On June 29, the Debtors notified the Court that Dream on Me Industries, Inc. was selected as the successful bidder for the buybuy Baby IP assets. The successful bid is subject to topping by a higher or otherwise better bid at the buybuy Baby “going concern” auction (for all or substantially all of the assets of the buybuy Baby brand). Everyday Health Media LLC was the backup bidder for the buybuy Baby IP assets. Dream on Me characterizes itself as baby boutique, selling bassinets, cradles, cribs, and toddler beds, selling through various retail partners.
Separately, the Debtors notified the Court of the rejection of 79 unexpired leases in connection with previously approved procedures.
Overstock.com plans to rebrand as Bed Bath & Beyond, which it believes will help accelerate its efforts to gain market share in the U.S. and Canada. Overstock noted that it believes its name was a headwind with many customers and suppliers who did not associate its brand with quality home products as the name was often associated with its prior liquidation model that no longer aligned with its current business model.
On June 28, Savers Value Village received approval for its registration statement from the SEC for its IPO. The Company is offering 18.8 million shares at a proposed price of $18 per share. The Company anticipates raising about $306 million, after underwriting expenses, which will be used to pay down term loan debt. The private equity sponsor, Ares Capital, is offering 3.5 million shares, however, Savers will not receive any proceeds from these shares. The IPO was upsized to $401 million resulting in a total market cap of about $4 billion and the stock started trading on June 29.
Ares will retain 83% – 86% of the stock. Savers operates 317 stores under the Savers, Value Village, Village des Valeurs, Unique, and 2nd Avenue banners.
Casey’s General Stores unveiled a new three-year strategic plan outlining five key initiatives: adding stores, accelerating the food business, improving operational efficiencies, creating a community-first culture, and bolstering its financial strength. The Company aims to open 350 new stores through organic growth and acquisitions by the end of FY26. It also shared its goal of growing EBITDA to an 8% to 10% CAGR. Another way it plans to fuel expansion is through grocery and food offerings. Following a 9% penetration of private label products in FY23, the Company is adding more store brand items and widening the selection of affordable snacks and beverages. Segmented assortment and pricing are also parts of the strategy as it works to tier, regionalize, and rationalize its product assortment.
In the Christmas Tree Shops, DIP case, following notification of default under the DIP Facility, the Debtors initiated plans to start GOB sales at the remaining 74 stores on or after July 6th, unless a buyer is found soon. The Company’s initial 10 stores were previously set to close by the end of June.
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Amazon’s Whole Foods opened a new 47,000 square-foot store in Washington D.C. on June 28. The chain operates 23 stores in the D.C. MSA, including eight within city limits.
In other news, Lidl also opened a store in Washington D.C. on June 28, in the Columbia Heights neighborhood. Lidl operates 28 stores in the D.C. MSA, including now two within city limits. Lidl also plans to open a 23,000 square-foot store in New York City, its second in Manhattan (the first opened last year in Harlem). Two future New York City locations will be in Brooklyn next year.
Hy-Vee confirmed the upcoming closure of its North Ottumwa, IA location. The Company decided not to renew the lease and will eventually close it later this year. Hy-Vee will continue to serve customers in the area through its South Ottumwa Hy-Vee location, Ottumwa Hy-Vee Drug Store, and two Ottumwa Fast & Fresh locations.
In the David’s Bridal, DIP case, the Court issued an order establishing procedures for the sale of 229 unexpired leases as part of an auction process.
REI will open a 22,000 square-foot store in Durango, CO in Spring 2025. It will be its 10th location in Colorado. This is the Company’s first announced opening for 2025. It has several new stores scheduled to open in the coming months, including in Clackamas, OR; Prescott, AZ; Sarasota, FL; Bedford, NH; Huntington, NY; and Laguna Hills, CA.
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On July 1, Scheels opened a 235,000 square-foot store in Wichita, KS in a former Sears location at the Towne East Square Mall. The location features a 16,000 gallon saltwater aquarium, a Fuzziwig’s Candy Shop, a wildlife mountain, rollerball, arcade games, sports simulators, a Signature Ginna’s Café, and 85 different specialty shops. This is the Company’s second location in Kansas and 31st overall.
Subway signed its 15th new master franchise agreement in the last two years, for stores in Bahrain, Georgia, Mainland China, Uruguay, Costa Rica, and Panama. The deal will add more than 4,000 restaurants across Europe, Middle East and Africa, Asia Pacific, and Latin America and the Caribbean within the next 20 years. Since 2021, Subway has signed agreements to open more than 9,000 international restaurants. In the past 18 months, Subway has opened more than 1,000 new restaurants globally, with more than 40% driven by master franchise agreements.
District Taco signed a 10-unit development agreement for locations in Virginia Beach/Tidewater Region, including the outer banks of North Carolina. The deal was signed with Brothers Best LLC, who plans to bring District Taco locations to cities including Williamsburg, Hampton, Newport News, Norfolk, Virginia Beach, Chesapeake, VA, and the northern outer banks of North Carolina. The first restaurant is scheduled to open later this year.
In the Cineworld Group, DIP case, the Court confirmed the Plan of Reorganization, under which the Debtors will continue to operate the business as a going concern. The Plan provides for a restructuring transaction that will (i) reduce funded debt by $4.53 billion through an equitization transaction, (ii) raise $800 million through a fully backstopped rights offering, to fund costs associated with emergence from the Chapter 11 cases, with any remainder to be used for general corporate purposes, (iii) provide the Debtors with $1.46 billion in exit debt financing, which would be raised either through a third-party financing process or through an exit debt facility, and (iv) provide the Debtors with the ability to enter into an up to $200 million in exit revolver financing, in each case, to fund the Debtors’ go-forward business operations. General unsecured creditors are expected to recover between 0.3% and 4.8% of allowed claims. On the effective date, the reorganized Debtors will release all avoidance actions. The Court has not indicated the effective date of the Plan, but in our experience, it will be approximately 10 days from June 28.
Separately, the Court entered an order authorizing the Debtors to reject six additional leases in Tampa, FL; Visalia, Davis, Hemet, CA; Oaks, PA; and Santa Fe, NM.
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