March 27, 2024
In the JOANN Inc., DIP case, the Court authorized the following on an interim basis: (i) access to $95 million of the $142 million DIP-to-Exit Facility, (ii) the use of cash collateral, and (iii) payment of prepetition trade claims in the ordinary course of business. As a condition to receiving payment on account of trade claims, the Debtors may require that trade creditors agree to continue providing goods and/or services on terms that are as good as or better than the terms that existed 120 days prior to the Petition Date. A hearing to consider final approval of first day motions is scheduled for April 17.
The Court scheduled a combined hearing to approve the adequacy of the Disclosure Statement and confirm the Plan on April 25, 2024.
In light of the relatively brief expected duration of the case, final approval of the full amount of the DIP-to-Exit Facility is anticipated just eight days prior to the scheduled confirmation hearing. That implies that the Debtors won’t have access to the full amount of the DIP Facility for most of the pendency of the case. Consequently, the full $142 million amount of the Facility will be more relevant in its function as an exit facility.
Walmart announced the closure of three stores, two in California and one in Maryland. The announcement follows three closures previously announced, two in the San Diego, CA area and one in Ohio. Walmart aims to open 14 new locations this year, and plans to spend $9 billion to upgrade and modernize 1,400 stores, including 650 locations this year.
Kroger announced that it has entered into a definitive agreement for the sale of its specialty pharmacy business to CarelonRx, a subsidiary of Elevance Health. Kroger Specialty Pharmacy is separate from other Kroger pharmacy operations, including in-store retail pharmacies and The Little Clinics, and therefore they are not included in this transaction. The deal, terms of which were not disclosed, is subject to customary closing conditions, including regulatory approvals and is expected to close in the second half of 2024; the sale is not expected to have an impact on the Company’s FY24 guidance.
Walgreens Boots Alliance will close two distribution centers in Orlando, FL and Dayville, CT, leading to roughly 650 lost jobs. The last day of operations at both facilities is May 17. Last year Walgreens raised its cost savings target by $1 billion to $4.50 billion by FY24. Besides closing these facilities, the cost-cutting plan involves Walgreens cutting non-essential spending and contracted and project work while optimizing the transportation network. Walgreens additionally cut hundreds of roles at its Deerfield corporate headquarters in November. Earlier this year the Company said it would close all of its Village MD clinics in Florida, in addition to shuttering six of those clinics in Illinois. The Company is also in the process of closing 650 to 700 U.S. stores by FYE24 (563 were closed by November 30, 2023).
Lidl US will expand its outdoor Garden Center concept to 76 stores across its footprint. Lidl Garden Centers offer a range of flowers, plants, soil, hanging baskets, planters, and other gardening accessories. The garden centers will roll out in three phases in select stores.
Save A Lot is facing eviction at a location in Hubbard, OH over a dispute about rent. The operator of the location, Hubbard Food Stores, said McConnell Enterprises LLC claims the grocer owes over $400,000 in rent. An agreement could not be reached at a mediation hearing on March 15. Hubbard says it has an oral agreement in place regarding rent with McConnell since a five-year lease ended in 2016. No official closing date has been set, but McConnell said it hopes to find another grocer to fill the space.
A South Korean newspaper reported that a South Korean entity was considering acquiring Topgolf Callaway. The story stated that the Company’s largest shareholders, BlackRock Advisors LLC, Providence Equity Partners LLC, and Thomas Dundon, who own about a third of its stock, are joining together to sell their ownership stake and management rights. The reports indicate the plan is to sell the Company outright, or spin-off the Topgolf business, which it acquired in 2020, and then sell the Callaway golf and apparel unit. No other major media source has confirmed the report yet. Topgolf Callaway issued a statement saying it was unaware of any discussions about selling its business.
In other news, Topgolf announced the repricing of its $1.24 billion first-lien term loan due 2030. The Company lowered the interest rate by 50 bps, to SOFR +300, and eliminated the 10 bps credit spread adjustment (CSA) for a total reduction of 60 bps. Interest expense savings are expected to be greater than $7 million on an annualized basis.
REI is opening a 39,000 square-foot store in Cedar Hills, OR on April 19.
Reports indicate that the founding family behind Nordstrom Inc. is working with Morgan Stanley and Centerview Partners to gauge interest from private equity firms in a potential deal to take the Company private. CEO Erik Nordstrom and other members of the Nordstrom family collectively own about a 30% stake in the Seattle-based company.
The report comes as Nordstrom and other department store operators contend with an environment of shifting consumer preferences and declining discretionary spending. Kohl’s management is once again grappling with activist investors and Macy's has become a takeover target, with investors particularly interested in monetizing the owned real estate of those retailers. Nordstrom owns, fully or partly, 81 Nordstrom stores and one Nordstrom Rack location.
Nordstrom formed a special board committee in 2017 to consider a bid by the family to go private and explored a deal with several private equity firms, including Leonard Green. In 2018, the special committee turned down an $8.40 billion offer, which was deemed as not acceptable.
Management could consider the shares as undervalued; Nordstrom stock rose about 10% yesterday but had been trading near a five-year low. The market capitalization was about $3 billion, while the Company also had $2.23 billion in net debt at its FYE on February 3, 2024.
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