News

Celebrating Excellence in Design

BY CSA STAFF

The winners of Chain Store Age’s 26th annual Retail Store of the Year design competition were honored at a reception and dinner in Dallas. Retailers, designers and architects of the award-winning projects attended the event, which was held just prior to SPECS/2008 and sponsored by Access 360 Media, Los Angeles.

G by Guess, the newest brand from Guess?, Inc., received top honors in the competition, named best overall entry. The store, in Escondido, Calif., also placed first in the exterior (mall) category and soft lines category, less than 5,000 sq. ft. The project was designed in-house, by the store-design team at Guess.

In addition to the grand prize, individual awards were given in a variety of retail and restaurant categories. In the newly added category of environmental sustainability, REI, Boulder, Colo., took top honors.

G by Guess and all the other winning projects were profiled in the February issue of Chain Store Age. Additional photos of the winners and information on the Retail Store of the Year competition can be found on www.chainstoreage.com. And for exclusive interviews with some of the award winners, visit the Chain Store Age TV section on the Web site.

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FINANCE

Supervalu ends Q2 with sales bump, and acquisition

BY Deena M. Amato-McCoy

Supervalu is kicking off the second half of its fiscal year with an acquisition.

The company is acquiring Associated Grocers, a transaction valued at approximately $180 million. The deal will give Supervalu the ability to expand its operations into a new part of Florida, and bring the company’s products and services to Associated Grocers’ diverse customer base in South Florida, the Caribbean, and other international markets.

Also part of the pending transaction, Supervalu has reached a long-term supply agreement with Associated Grocers’ largest customer that will go into effect upon the closing of the transaction, the company reported.

During Associated Grocers’ last fiscal year, which ended on July 29, the company’s revenues were approximately $650 million. This is an estimate by Supervalu under its accounting policies.

The news comes as Supervalu reported a sales increase for its second quarter. For the ended September 9, the company reported net sales of $3.80 billion, a 35% increase compared to $2.81 billion last year. This surpassed FactSet estimates of $3.79 billion.

The company reported a net loss from continuing operations of $25 million, which included a $27 million after-tax asset impairment charge and $16 million of after-tax merger and integration costs. When adjusted for these items, second quarter fiscal 2018 net earnings from continuing operations were $18 million, or $0.46 per diluted share. This also beat the FactSet consensus of $0.36.

Second quarter wholesale net sales were $2.74 billion, compared to $1.73 billion last year, an increase of 58%. Retail net sales were $1.02 billion, a 1.1% increase compared to $1.03 billion last year. The net sales decrease reflects identical store sales of negative 3.5% and closed stores, partially offset by sales from acquired and new stores.

“We continue to make tremendous strides in driving our strategy, evidenced by another quarter of strong growth from our core wholesale business which now represents over 70% of net sales,” said Supervalu president and CEO Mark Gross. “Additionally, our results now include the benefit of Unified Grocers, where I’m pleased that the transition is going well. We have a lot to be excited about as we turn our focus toward the back half of our fiscal year.”

Looking ahead, Supervalu expects fiscal 2018 net earnings from continuing operations to be in the range of $31 million to $50 million. Adjusted EBITDA, including the contribution from Unified Grocers, is expected to be in the range of $475 million to $495 million, according to the company.

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STORE SPACES

Report: Online giant to move into Macy’s turf — literally

BY Deena M. Amato-McCoy

Macy’s will soon be sharing a building with one of its chief rivals in the apparel category.

Amazon has leased the top six floors of office space above Macy’s Seattle store. The company expects to move into the building around late summer 2018, according to the Cincinnati Business Courier.

The department store retailer sold the top four floors of its downtown Seattle building to Starwood Capital Group in 2015, for $65 million. It sold two additional floors this year.

Amazon’s space in the Macy’s building, which is located on Seattle’s Pine Street, is 312,000 sq. ft., large enough to hold about 1,500 employees. Amazon’s operations will be positioned above the Macy’s store that operates on the ground level and basement, the report said.

The choice is a poignant one for the online giant considering the building’s long legacy in retail history. Bon Marché Department Store made the space its home in 1929. At one time, it was also the only whole-block development in the city. The building was named a historic city landmark in 1988.

Amazon’s new lease comes on the heels of the company’s recent announcement that it will also lease the entire office-space portion of the planned Rainier Square downtown skyscraper. This lease will encompass a massive 722,000-sq. ft. space, according to The Seattle Times.

Commercial real estate brokerage firm Broderick Group told the Seattle Times that including these projects, Amazon has leased 1.65 million sq. ft. in Seattle across five buildings so far this year.

Amazon also remains on the hunt for a second headquarters in North America — a building it is calling “HQ2.” Amazon expects to invest over $5 billion in HQ2’s construction, and the office will include as many as 50,000 high-paying jobs.

Amazon will accept proposals through Oct. 19, and announce its decision next year, according to the company’s request for proposal (RFP).

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