Weekly Store Openings and Closures Tracker #11: BCBG Reaches Sale Deal
KEY POINTS
Fung Global Retail & Technology tracks store openings and closures for a select group of US retailers.
- This week, Aldi has reaffirmed its commitment to expand in the US by setting a 2,500-store target by 2020, under a $3.4 billion investment plan. Meanwhile, Gymboree and Papaya Clothing have both filed for bankruptcy.
- BCBG has reached an agreement to sell more of its assets to Marquee Brands and Global Brands Group for an undisclosed amount. The sale is pending approval from the US Bankruptcy Court. BCBG will continue to operate under the new owners.
- Merger talks between Hudson’s Bay Co. and Neiman Marcus have reportedly broken down.
- Year-to-date 2017, the number of store closure announcements has increased 186% year over year, bringing the total number of stores to be closed to 4,789, with more to surely follow.
2017 Store Openings and Closures
What is happening this week?
There are no changes in the total number of store openings and closures this week, although Aldi did announce that it will ramp up its long-term store expansion plan. Meanwhile, BCBG Max Azria, the fashion retailer embroiled in bankruptcy, is expected to remain in operation after being acquired by Marquee Brands and Global Brand Group. To add to the misery of US retail, both Gymboree and Papaya Clothing filed for Chapter 11. Talks concerning the possible sale of Neiman Marcus to Hudson’s Bay have also come to a halt this week.
Aldi Targets 2,500 Stores by the End of 2020
Aldi is aggressively expanding in the US market. The German grocery retailer announced its target of opening 2,500 stores in the US by the end of 2020, under a $3.4 billion capital investment plan. It is set to become the third-largest grocery store by store count in the US, serving 100 million customers per month. Our reported numbers of 400 new stores by the end of 2018 remain unchanged.
BCBG Strikes Bankruptcy Sale Deal
BCBG Max Azria has reached an agreement to sell all of its assets to Marquee Brands and Global Brands Group under a Chapter 11 restructuring plan. Global Brands will acquire certain assets associated with the operation of the BCBG business, and will be responsible for the marketing, promotion and distribution of products bearing the BCBG brand. It will also manage selected retail stores, the wholesale operation and the e-commerce platform of BCBG. Meanwhile, Marquee will be responsible for growing BCBG and related brands into new product categories, distribution channels and geographies, following the acquisition of BCBG’s intellectual property. BCBG will continue to operate as a fashion brand in the retail market. The sale is pending approval from the US Bankruptcy Court, with an expected closing date no later than July 31, 2017.
Gymboree and Papaya Clothing File for Bankruptcy
Gymboree announced it has filed for Chapter 11, citing debt load as a major reason. The children’s retailer is expected to continue normal business operations for the time being. The retailer aims to reduce its debt by $900 million through the bankruptcy filing and establish a sustainable capital structure. The company’s balance sheet is significantly leveraged after the buyout by Bain in 2010. Teen retailer Papaya Clothing has also filed for Chapter 11 this past week, having suffered from declining sales and an over-expanded store footprint resulting from its expansion strategy over the past few years.
Neiman Marcus Sale Talks with Hudson’s Bay Break Down
The merger talks between Hudson’s Bay Co. and Neiman Marcus have broken down, as reported by The Wall Street Journal. We had previously reported on the merger discussion in our May 12 report, but it now seems the deal will not move forward.
2016 Store Openings and Closures
