Kroger’s newest acquisition is a fast-growing meal kit company
Meal kits are heating up the grocery wars, both in store and online.
Kroger Co. is acquiring Home Chef, the country’s largest private meal kit company by sales, in a deal that could total $700 million. Kroger said it would pay an initial purchase price of $200 million and up to an additional $500 million in “earnout” payments to Home Chef if certain sales and other performance goals are met. The deal comes a week after Kroger took a stake in British online grocer Ocado Group.
Once the deal, which is subject to regulatory approval, is completed, Kroger will make Home Chef meal kits available online and in its stores. The Chicago-based company will operate as a subsidiary of Kroger, maintain its e-commerce business, and assume responsibility for Kroger’s meal solutions portfolio. Home Chef will continue to operate its offices and facilities.
“This merger will introduce Kroger’s 60 million shoppers to Home Chef, enhance our ship-to-home and subscription capabilities, and contribute to Restock Kroger,” said Yael Cosset, Kroger’s chief digital officer. “As one of the fastest growing meal kit companies in the country, Home Chef is poised for even more explosive growth. We admire their focus on the customer, culture of collaboration, dynamic experimentation, and demonstrated financial success.”
Kroger rival Albertsons acquired meal kit company Plated last summer. It plans to roll out the kits to hundreds of stores by yearend. Walmart will make its meal kits be available in more than 2,000 of its stores over the course of this year.
And Blue Apron recently plans to sell its kits in supermarket.
The deal is not Kroger’s first entry into meal kits. The grocer’s Prep+Pared meal kits are now available in more than 525 stores. Kroger said the Home Chef meals would complement its own offering.
“Customers want convenience, simplicity and a personalized food experience,” Cosset said. “Bringing Home Chef’s innovative and exciting products and services to Kroger’s customers will help make meal planning even easier and mealtime more delicious.”
Kroger expects the transaction to have no effect on 2018 earnings, and to be slightly accretive in 2019.
Ralph Lauren sales, profit beat expectations as turnaround gains ground
Ralph Lauren reported better-than-expected results for its fourth quarter amid the company’s ongoing shift to reduce its department store distribution and sell more products at full-price.
Ralph Lauren reported net income of $41.3 million, or 50 cents per share, in the quarter ended March 31, compared with a loss of $204 million, or $2.48 per share, in the year-ago period during which it incurred $322 million in restructuring charges. Excluding items, earnings per share came in at 90 cents, higher than the 83 cents per share that analysts had expected.
Net revenue fell 2 % to $1.53 billion, but was above analysts’ estimates of $1.48 billion. Same-store sales on a constant currency basis fell 1%, not as bad as expected.
Ralph Lauren said its average unit retail across its direct-to-consumer network was up 4% for the full year, with growth in every quarter, while discount rates were down across all regions and all channels. The company said it continued to close unproductive distribution and reduce off-price penetration within wholesale, during the same period, and began to upgrade its store environments.
“We delivered on our commitments for the fourth quarter and full year, and we made strong operational progress,” said Patrice Louvet, president and CEO. “We start the new year with a solid foundation – including a clear strategic plan to deliver long-term growth and value creation, an engaged global organization, and a strong balance sheet.”
Billionaire toy mogul abandons quest to buy some U.S. Toys “R” Us stores
Isaac Larian, founder and CEO of toy company MGA Entertainment Inc., has thrown in the towel when it comes to Toys “R” Us.
Larian has given up his effort to buy nearly 300 hundred U.S. Toys “R” Us stores from the bankrupt chain after he and the company’s debt holders were unable to reach an agreement, reported The Los Angeles Times.
A group of investors led by Larian had submitted a $675 million bid April 13, for 274 of the 735 U.S. and Puerto Rican stores the retailer is liquidating. It was rejected as inadequate.
“The so-called advisors and lawyers milked that company to death in a matter of seven months, which is remarkable,” Larian said in the report. “And the current lenders are just not in touch with reality on valuation.”
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