retail news in context, analysis with attitude

The New York Post reports that BJ's Wholesale Club is being put up for sale by its private equity owners, and Amazon is said to have "modest internal interest" in acquiring the chain.

The story says that owners CVC Capital Partners and Leonard Green & Partners have scrapped plans for an initial public offering (IPO) for the chain, and instead "are pressing ahead for an outright sale that could fetch more than $4 billion." They bought BJ's six years ago for $2.8 billion, though analysts believe that ownership has hurt the chain through a combination of "cost-cutting and cash-skimming."

The Post frames the story this way:

"BJ’s has been interviewing bankers so it can begin a sale process, and the company plans to distribute sales books in a few weeks, sources said.
Retail-savvy buyout firms, like KKR, Bain Capital, TPG and Blackstone, are expected to take a look, insiders said. In 2011, Walmart made an unsuccessful approach to buy BJ’s, but is unlikely to make another attempt, one source speculated.

"Meanwhile, Amazon — which has been exploring an expansion into brick-and-mortar stores after conquering online retailing — has also recently discussed evaluating BJ’s as an acquisition target, a source close to the situation said."
KC's View:
I've generally been skeptical about rumors that Amazon is interested in acquiring an existing bricks-and-mortar retailer, but this one would seem to make more sense than some of them. After all, Amazon could use the warehouses for more than just retailing ... but it also might be a way to reinvent a new format that builds on what it has been doing.

I'm still not persuaded. But I am intrigued. Modestly.