Retail News

In the 99 Cents Only, DIP case, the Court cancelled the auction for the sale of the Debtors intellectual property, personal property and leasehold interests that have not been assumed and assigned or rejected. The Court designated YM Inc. as the successful bidder for these assets. YM is a Canadian corporation which controls brands including: Charlotte Russe, Aeropostale, Urban Planet, Sirens, Bluenotes, Thriftys, Suzy, Urban Kids, Stitches, West 49, And Amnesia. The consideration is $3.9 million, plus certain assumed liabilities.

The Court issued an order approving the sale of designation rights for 112 store leases and the Company’s intellectual property to Dollar Tree, Inc. The stores are located in Arizona, California, Nevada, and Texas. A purchaser of designation rights is able to assign the leases during a specified time period. Dollar Tree said it will reopen the stores with its own products under its brand beginning in the fall. The Debtors also assumed and assigned 58 leases to Dollar Tree. The Debtors transferred a total of 170 leases to Dollar Tree between the two transactions.

The Court entered an order authorizing the sale of 11 Texas locations to Ollie's Bargain Outlet and OBO Ventures for a total price of $14.6 million. 

Dollar Tree is laying off 50 workers at its corporate office in Chesapeake, VA. Layoffs will occur via both restructuring and reductions. The downsizing is the result of a recently announced store portfolio optimization, under which it will close 1,000 stores in the coming years, including 600 Family Dollar locations during the first six months of this year. About a year ago, about 90 workers were laid off at the corporate headquarters.

T&T Supermarket, a banner owned by Loblaw Companies, announced plans to open a second location in Washington State. Last year, T&T announced plans to open its first store in the U.S. in Bellevue, WA; originally scheduled to open this summer, the opening has been delayed. The second store is slated to open in a 30,000 square-foot space in Lynnwood, WA. The Company also plans to open a 55,000 square-foot location in Burnaby, BC, Canada next summer, its second store in the city. Founded in 1993, T&T operates over 30 stores in British Columbia, Alberta, Quebec, and Ontario. 

REI will open its first Kentucky store later this year in Louisville. The 31,000 square-foot store will feature a wide assortment of outdoor gear and apparel for camping, cycling, hiking, running, fitness, and climbing. Earlier this year, the Company opened its 10th Colorado location, adding to the list of planned 2024 openings, which includes stores in New York, Arizona, Oregon, California, and Oklahoma. For 2025, REI has announced two store openings so far: Durango, CO and St. George, UT. 

Bob’s Stores and Eastern Mountain Sports plan to close five underperforming stores, including one Bob’s in Southington, CT, two Bob’s in New Jersey, and two Eastern Mountain Sports locations — one in New York and another in New Hampshire. Bob’s currently operates 23 units, while Eastern Mountain operates 25. Management said “Bob’s Stores and Eastern Mountain Sports have recently needed to aggressively reposition the business to ensure the longevity of the company. These closings have been a challenging yet necessary step."

Osmium Partners, Kirkland’s largest shareholder with a 9.8% stake, sent a letter to the Company’s board expressing its belief that Kirkland’s “is materially undervalued and urging the board of directors to consider a transaction with a strategic buyer or partner and for the Issuer to hold an investor day before June 26, 2024.” They mentioned Kirkland’s physical store footprint as a uniquely valuable asset to pure-play e-commerce retailers such as Wayfair and Beyond (dba Bed, Bath & Beyond), “which need an omnichannel strategy to manage returns more efficiently.”

GameStop's stock experienced a surge Monday after individual investor Keith Gill posted a screenshot on Reddit purporting to show holdings of 5 million GameStop shares purchased at an average price of $21.27, a position worth $115.7 million as of Friday’s closing price of $23.14. GameStop shares traded at $38 in early trading before they were temporarily halted for volatility. Gill’s screenshot also shows that he appears to own 120,000 options contracts that expire on June 21. These contracts confer the right to buy GameStop shares at $20 each, a position worth $65.7 million as of Friday’s close. This latest surge comes after GameStop rallied 180% over a span of two days back in mid-May after the same investor posted for the first time on social media since the original rally in 2021. 

Indigo Books & Music announced that the Company has obtained a final order from the Ontario Superior Court of Justice approving the previously-announced agreement to be taken private by Trilogy. Pursuant to the terms of the Arrangement, Trilogy Investments L.P will acquire the approximately 39.4% of the issued and outstanding common shares of Indigo that TILP, Trilogy Retail Holdings Inc. and their respective affiliates do not currently own for $2.50 per share in cash.

Management at Barnes & Noble made the following points during a recent conversation with RetailStat analysts:

• There has been steady industry-wide growth in the market for physical books; moderate market share gains by physical bookstores have been propelled by new store openings.
• The Company continues its shift to smaller stores(8,000 square feet or less)from its traditional footprint of 20,000 square feet or larger.
• The average store size is currently 20,000 square feet. About 5% of the total units are smaller; 25% of new units are small, highlighting the impact of the shift.
• Bigger stores generally have higher sales, but not always. On average, the smaller and bigger units are equally profitable as a percent of sales.The Upper East Side, New York City store has the highest sales per square foot in the business.
• During FY23, the Company opened 30 new units and closed 18 (12 net openings). In FY24, management expects about 60 openings and 18 closings (42 net openings),essentially increasing the annual net rate of growth by 250%.
•  

In the Rite Aid, DIP case, the Debtors filed a motion seeking approval of an incremental $75 million new money DIP financing arrangement (DIP Notes Facility), funded by certain of the prepetition second lien note parties. The motion states the Debtors require additional DIP financing is necessary to “anchor their going-concern restructuring and bridge to emergence.” The Court also approved the schedule for confirmation of the Plan of Reorganization.

The Debtors filed a motion to enforce the sale order and compel performance by MedImpact under the Elixir asset purchase agreement (APA). According to the motion, MedImpact has attempted to modify its bargain, extract additional value from the Debtors, and shift more than $200 million of liabilities back to Rite Aid and its creditors. The Debtors contend that MedImpact has made unreasonable interpretations of the APA to recharacterize various assumed liabilities (the obligation of MedImpact) as excluded liabilities (the obligation of the Debtors). These liabilities include rebates payable to Elixir clients, claims payable to pharmacies, amounts owed to McKesson, pharmacy performance guarantee reserves, outstanding checks and other expenses. The Debtors contend that the Court can resolve this dispute by applying the language in the MedImpact APA and the Sale Order. Finality here is critical to satisfying creditor recoveries contemplated by the Plan-related settlements, meeting certain Plan closing conditions, satisfying certain DIP obligations, and operating the Debtors’ go-forward business.

Rubio's Coastal Grill has abruptly shuttered 48 locations in California, citing underperformance and the "current business climate in the state." This could be referring to the April 1 raising of the minimum wage to $20 per hour, up 25% from the previous minimum wage. Several chains have raised their menu prices in response, or plan to remove the state from their expansion plans. Rubio's struggled prior to the wage increase; it closed seven locations in 2023, and its footprint has shrunk by 7% in the last three years. Of the 48 units closed last week, 11 were in Northern California, 24 in Los Angeles, and 13 in San Diego. Rubio's will continue to operate 86 stores in California, Arizona, and Nevada. 

BurgerFi announced it would be "considering strategic alternatives" as it looks to address fiscal challenges. The Company has entered into a forbearance agreement with its existing creditors, with a relief period extending to at least July 31. Additionally, its lenders L Catterton and TREW, have agreed to lend the Company $4 million to facilitate the review process. 

Legislators in Illinois have approved a budget that eliminates the state's 1% sales tax on groceries. The budget goes into effect on July 1. The state had previously suspended the tax in July 2022, but resumed collecting it in June 2023. Eliminating the tax will help consumers grappling with inflation, but it will cost municipalities that depend on the tax for revenue. While the budget ends the sales tax on groceries, it allows local authorities to impose their own grocery taxes without gaining approval from voters. Illinois is one of a minority of states that collect a statewide sales tax on groceries. Other states include Alabama, Kansas, and Missouri.