retail news in context, analysis with attitude

…with brief, occasional, italicized and sometimes gratuitous commentary…

• Save-A-Lot, which was acquired by Canadian private equity group Onex Corp. from Supervalu in 2016, said on Friday that it "has reached an agreement with a substantial majority of its lenders to recapitalize the business and deleverage its balance sheet," a move that it hopes will give it breathing room to implement a business plan that will resuscitate the company's operations.

According to the announcement, "Under the terms of the agreement, which has been approved by lenders representing 67% of the Company’s term loan credit agreement, Save A Lot will receive $138 million in new capital to strengthen the business and provide financial flexibility. In addition, the agreement provides for a reduction of indebtedness of over $400 million, strengthening the Company’s balance sheet and significantly reducing annual interest expense."

“The agreement with our lenders is an important step in securing Save A Lot’s long-term success,” said Kenneth McGrath, Save A Lot's CEO. “This is a significant statement of confidence in our business and gives us the appropriate levels of capital to compete effectively.”

I hope so, for Save-A-Lot's sake. I've been to way too many of its stores that suffer from "nobody gives a damn" syndrome, and the company has not been able to get the kind of traction based on a defined differential advantage that would allow it to survive. They may have money now … but the question is, does Save-A-Lot have any good and original ideas?


• In Oregon, the Bulletin reports that Rudy's Market Inc., parent company to Newport Avenue Market in Bend, has acquired the Terrebonne Thriftway, in Terrebonne, and renamed it Oliver Lemon's.

Terms of the deal were not disclosed.

“We believe Oliver Lemon’s will be their own distinct brand, different than Newport,” Lauren Johnson, CEO, tells the Bulletin. “The opportunity presented itself, and we wanted to be in Terrebonne. We thought it was a fun name and reflects who our employee owners are and that we live in a great place with colorful characters here.”

The story notes that "Rudy Dory founded Newport Avenue Market, but the company has been employee-owned since 2015 when the family owners created an employee stock ownership plan, or ESOP. There are now more than 100 employees at the Bend store.
This is the second store that Rudy's has acquired in recent years; in 2017, it bought Melvin’s Fir Street Market in Sisters.

Sisters is about 22 miles northwest of Bend; Terrebonne is about 23 miles due north.

Newport Avenue Market is one of my favorite independent retailers - they're smart and creative and ambitious, and I'm thrilled to see that the company is finding ways to grow at a timer when a lot of small retailers are thrashing about trying to find a solution. Newport Avenue Market's approach has always been to create strong connections with the communities it serves, and be willing to try new things whenever and wherever possible. I love it.


• The Wall Street Journal reports that "Bed Bath & Beyond Inc. has signed a deal to sell roughly half its real estate to a private-equity firm and lease back the space in a transaction that will generate more than $250 million in proceeds for the troubled home-goods retailer, according to people familiar with the situation … The proceeds will be used to repay debt, buy back shares and fund a turnaround effort."

The troubled retailer, the Journal writes, "is expected to evaluate the rest of its real estate and retail concepts, which include the Buy Buy Baby chain and Harmon drugstores."

Another example of a company that really doesn't do anything different, and which has seen its competitive advantages erode with the growth of Amazon. My question is this: Now that you have some financial breathing room, what are you going to do with it that is innovative and creative?
KC's View: