Done deal: TravelCenters exits C-store business
TravelCenters of America has officially sold its freestanding convenience stores.
The company has sold its Minit Mart convenience store business to EG Group, a privately held convenience store retailer based in the United Kingdom, for approximately $330.8 million. (The Minit Mart stores have been a part of TravelCenters’ portfolio for about five years.)
The deal includes 225 standalone convenience stores, one standalone restaurant, five parcels of land and certain related assets. The company initially announced the sale agreement in September.
The estimated net proceeds of $321.4 million after transaction related costs are expected to be used to reduce the company’s future rent and/or interest payment obligations, according to the company.
“This strategic divestment is a significant step in support of TA’s strategy to be a more focused leader in the travel center industry,” said Andrew J. Rebholz, TravelCenters’ CEO. “The sale of the convenience stores business will allow us to address the company’s leverage, focus more on our core travel centers business and thoughtfully pursue our growth programs.”
TravelCenters of America operates in 43 states and in Canada, and has standalone restaurants in 13 states.
HBC expands Q3 loss, but Saks shines
Hudson’s Bay Co. reported a higher loss in its third quarter amid higher depreciation and amortization expenses and foreign exchange losses.
The department store giant’s net loss for the third quarter widened to C$124 million ($93.36 million) from C$116 million in the year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization rose to C$63 million from C$40 million, fueled by sales growth and improved gross margin and expense rates.
Revenue rose 5.6% to $2.187 billion. Overall same-store sales increased 2.9%, with total comparable digital sales increasing 8.0%. By brand, same-store sales increased 7.3% at Saks Fifth Ave., and 0.9% at DSG (Hudson’s Bay, Lord & Taylor and Home Outfitters). Comp sales at Saks Off 5th fell 2.3%
Helena Foulkes, HBC’s CEO, said the company was encouraged by the ongoing improvement of its business, with year-to-date Adjusted EBITDA of $151 million, up $106 million from the prior year.
“The bold strategic actions we are taking are beginning to pay off, and the recent closing of the European transaction will now allow us to concentrate on the North American business,” she said. “We are driving our retail performance with a firm emphasis on fixing the fundamentals and improving our omnichannel customer experience.”
Foukes added that HBC is making strategic decisions to focus its efforts on the areas with the greatest opportunities for growth. Last month, the company completed its deal to sell a controlling interest in its European retail operations to Karstadt in Germany. It also is forming a 50-50 partnership in its European real estate with Karstadt.
“Saks Fifth Avenue’s exceptional performance further solidifies its leading position within the luxury segment and we are continuing to drive the upside in the business,” Foulks said. Performance at Hudson’s Bay has been solid, and we believe that there is a tremendous opportunity to build on our strength in the market as Canada’s preeminent multi-category retailer. Improved sales trends and better profitability at our smallest businesses, Lord & Taylor and Saks Off 5th, are also encouraging as we start to reposition those businesses for the future.”
HBC’s efforts to improve its business have not gone far enough for some investors enough. Hedge fund Land & Buildings, which owned 5% of HBC in its last (July 2017) disclosure, recently called for the company to sell Saks Fifth Avenue and Lord & Taylor and its 50% interest in the European joint venture to Signa, reported Reuters. The hedge fund said it may call for a special shareholder meeting to bring about changes to the company’s board.
Walmart in a funding first
Walmart is partnering with Colorado to empower retail workers.
The discount giant announced more than $4 million in support of the Colorado Workforce Development Council (CWDC). It is Walmart’s first grant to a state government to support workforce development and will help provide retail advancement opportunities through training and up-skilling.
The grant will allow the CWDC to partner with local workforce development boards across Colorado to launch 10 new retail sector partnerships. Through each of these public-private partnerships, representatives from workforce boards, economic development and education will work with retail employers in the community to design upskilling and training programs that support career advancement for frontline workers and can be a model for workforce development organizations across the U.S. to follow.
The funding comes at a time when there are estimated five million unfilled jobs in the U.S., but 24 million frontline workers who might be able to fill these jobs if given the opportunity to develop advanced training, according to UpSkill America. By improving the quality of skills training and increasing opportunities for advancement, retail jobs can be a powerful engine for economic mobility.
This support for the CWDC is part of Walmart and the Walmart Foundation’s five-year, $100 million Retail Opportunity Initiative, a philanthropic initiative aimed at making it easier for frontline employees in retail and adjacent sectors to gain new skills and advance in their careers. To date, Walmart and the Walmart Foundation have funded more than $80 million in grants designed to increase the economic mobility of retail and related-sector workers.
“Our support of the Colorado Workforce Development Council is a further step in our efforts to strengthen the workforce ecosystem beyond Walmart’s walls through collaboration with public and private sector leaders,” said Julie Gehrki, VP of philanthropy at Walmart.
The CWDC and sector partnerships will aim to train incumbent workers through Walmart’s funding, as well as share best practices for building retail career pathways and upskilling workers through the development of a “how-to” guide that will be shared statewide. The statewide expansion builds on the success of the Denver Retail Sector Partnership, convened by the Denver Office of Economic Development. The industry-led partnership focused on workforce as a key issue in 2016 and 2017 and provided skills training, work experience and paid youth pre-apprenticeships through a previous Walmart grant.
Through the Retail Opportunity Initiative, Walmart also recently announced nearly $4 million in grants to the Foundation for California Community Colleges, Code for America Labs, Inc. and edX.org to help provide workers access to education, training and skills to create innovative pathways for lifelong learning.