Finance & Capital Management

Major shopping center openings in 2014 beg the question, “Are we back on track?”

Last year may be the first 365-day period since the Great Recession that there is enough new shopping center space to crow about.

Chain Store Age’s annual development survey — spanning 26 years — reported pretty spotty new-build efforts from 2009 to 2013, but in 2014 some significant projects opened.

Gaining market share and geographic coverage are top priorities driving deals

Retail continues to rally for deals in 2015, and the sector could be on the cusp of another major year for mergers and acquisitions. Already this year, we’ve seen speculation about a number of potentially massive deals — from a possible buyout of Rite Aid by Walgreens Boots Alliance to the proposed merger between Staples and Office Depot. Looking across the industry, as part of BDO’s annual Retail Compass Survey of CFOs, we asked chief financial officers at leading U.S.

The upcoming Oct. 1, 2015, mandate for U.S. retailers to adopt POS systems that can securely accept and process transactions using EMV (Europay, MasterCard, Visa)-compliant, chip-based payment cards is fast approaching. Retailers that are not in compliance with the mandate after that date will be held liable for any fraudulent transaction committed with a chip-based card.

Brian Unmacht (left) and George D. Bartell

Pittsburgh – GNC Holdings Inc. demonstrated some weakness during the first quarter of fiscal 2015 with shrinking profit and revenue. Net income dropped 9% to $63.27 million from $69.9 million a year earlier, driven by rising selling, general and administrative (SG&A) expenses.

Net revenue fell slightly to $670.25 million from $674.46 million. Same-store sales decreased 4.1% in domestic company-owned stores (including GNC.com sales). In domestic franchise locations, same-store sales decreased 1.5%.

Cincinnati – The Kroger Co. plans to build 11 new stores and remodel 22 existing stores in the Indianapolis area. Kroger will spend $464.6 million in a four-year plan that actually started in 2014.

The plan includes constructing seven 125,000-sq.-ft. Kroger Marketplace stores in Fishers, Franklin and Indianapolis counties. Those stores will cost $141 million and create 1,350 permanent jobs.

Watsonville, Calif. – West Marine Inc. slightly shrunk its net loss to $10.3 million in the first quarter of fiscal 2015 from $11.4 million in the same period a year earlier. Cost of goods sold and selling, general and administrative (SG&A) expenses combined to total more than net revenues.

Camp Hill, Pa. – Same-store sales increased 3% in April 2015, compared to the same month a year earlier. April front-end same-store sales, which were negatively impacted by 0.9% due to a shift in the timing of Easter, decreased 0.5%.

Pharmacy same-store sales, which included an approximate 1.45% negative impact from new generic introductions, increased 4.6%. Prescription count at comparable stores increased 1.8% from the prior-year period.

New York - The U.S. retail and consumer sector experienced a strong first quarter in 2015 for merger & acquisition (M&A) activity, which was driven by seven megadeals (deals with a value of more than $1 billion). According to PwC's U.S. retail and consumer deals insights report, 39 deals were announced for the quarter (with values more than $50 million), up 11% from fourth quarter 2014, but down 9% from first quarter 2014.

New York - RDG Capital Fund Management, a shareholder of TravelCenters of America, has engaged in what it calls “constructive dialogue” with TravelCenters CEO Tom O'Brien and other board members. RDG said the TravelCenters board has indicated a willingness to consider selling some company-owned real estate as a source of liquidity.