REAL ESTATE

Whole Foods acquires seven Dominick’s leases in Chicago area

BY Dan Berthiaume

Austin, Texas — Whole Foods Market has acquired leases from Safeway Inc. for seven locations formerly operated as Dominick’s stores. Terms of the agreement were not disclosed.

Whole Foods expects the locations to remain closed for remodeling in 2014 and re-open as new Whole Foods Market stores in 2015. The transaction is expected to be slightly dilutive to earnings per share in fiscal year 2014, primarily due to the pre-opening rent associated with these new leases. The company has three stores in development in the Hyde Park and Englewood neighborhoods of Chicago and in Lake Forest with openings scheduled through calendar year 2017.

The leases are located in the neighborhoods and towns of Edgewater, Lincoln Park, Streeterville, Wet Loop, Elmhurst, Evanston, and Willowbrook.

"We are incredibly excited about this opportunity to quickly and significantly expand our presence in the greater Chicago area," said Michael Bashaw, Whole Foods Market Midwest regional president. "These locations fit well with our 19 existing stores as well as the three stores currently in development. We plan to remodel each store to reflect its community and look forward to offering fresh, natural and organic foods to a broader base of Chicago customers."

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REAL ESTATE

Five Below to enter Tennessee

BY Dan Berthiaume

Philadelphia — Five Below will enter the state of Tennessee, with plans to open up to five new stores in the market by spring of this year. With this new market, Five Below will operate stores in 20 states.

Five Below’s 600,000-sq.-ft. distribution center in Olive Branch, Miss., which opened in spring 2013 and currently supports the company’s southern and Midwestern stores, will service the new Tennessee market. The company will provide further details on its 2014 store growth plans when it releases its fiscal 2013 fourth quarter earnings results in March 2014.

"After successfully opening 60 net new stores in 2013, including entering the new markets of Austin and Dallas, we are excited to begin our 2014 store opening program with this expansion into the Tennessee market," said Tom Vellios, co-founder and CEO of Five Below. "We see significant opportunities to continue to expand our reach in new and existing markets with our class of 2014 stores, drawing new customers to our concept while providing the brand name and trend-right merchandise that our loyal customers have come to expect from Five Below."

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FINANCE

Holidays fuel strong Q3 for Michael Kors

BY Dan Berthiaume

Hong Kong – Global luxury retailer Michael Kors increased net income during the third quarter of fiscal 2014 77% to $229.6 million from $130 million in the third quarter of fiscal 2013. Retail net sales grew 51.3% to $503.4 million, driven by a 27.8% increase in same-store sales and 98 net new store openings since the end of the third quarter of fiscal 2013.

John D. Idol, chairman and CEO of Michael Kors, cited holiday performance and the retailer’s luxury store environment, as well as brand awareness, in driving the impressive quarterly results.

“Michael Kors enjoyed an outstanding holiday season, as global brand awareness continued to drive strong demand for our luxury product,” said Idol. “Same-store sales increased 28%, which exceeded our expectation and represents our 31st consecutive quarter of growth. We believe that our consistently strong performance is attributable to the creative vision of Michael Kors and his talented design team as well as the distinctive jet-set in-store experience that we provide in both our retail stores and our shop-in-shops. We remain very excited about our future growth prospects as Michael Kors continues to gain momentum as a global luxury lifestyle brand.”

For the fourth quarter of fiscal 2014, Michael Kors expects total revenue to be in the range of $790 million to $800 million. This assumes a same-store sales increase in the range of 15% to 20%. For fiscal 2014, the company now expects total revenue to be in the range of $3.18 billion to $3.19 billion. This assumes a comparable store sales increase of approximately 25%.

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