Mergers & Acquisitions

The Kroger Co. is expanding its position in the pharmacy vertical.   Axium Pharmacy Holdings Inc., a wholly-owned subsidiary of Kroger, will acquire Orlando, Florida-based specialty pharmacy retailer ModernHealth. Financial terms of the agreement with ModernHealth parent company ModernHC Holdings Inc. were not disclosed.   The deal will create a combined specialty pharmacy that will operate as a wholly-owned Kroger subsidiary.  

Even geeks appreciate the convenience and hands-on experience of visiting a physical store.   Recognizing the continuing popularity of brick-and-mortar, specialty video game retailer GameStop Corp. has been extending its pure-play ThinkGeek banner into physical stores. GameStop purchased ThinkGeek parent company GeekNet Inc. in 2015. ThinkGeek specializes in selling “loot,” or collectible items and memorabilia, rather than video games.  

Consumer goods giant Unilever is paying a reported $1 billion to buy an online retail start-up that has yet to turn to profit.   Unilever PLC announced it is buying Dollar Shave Club, the razor delivery subscription service known for its irreverent brand positioning and viral You Tube videos. Terms of the deal were not announced, but The New York Times and other media outlets reported Unilever is paying $1 billion in cash for the scrappy company, which has yet to turn a profit but expects to do so by yearend.  

The Unilever-Dollar Shave Club deal reflects the growing importance of emerging brands, vertical integration, and the consumer direct route to market favored by new CPG market entrants such as Dollar Shave Club, Honest Co., and NatureBox.

It appears that Aeropostale Inc., which declared Chapter 11 bankruptcy in May, will be selling its assets rather than reorganizing.       The teen retailer said in court papers that “reorganization on a standalone basis is not feasible.” Instead, it will look for a “stalking horse” to make the lead bid at an auction next month, Bloomberg reported.   

Versa Capital Management has formed a new holding company, called Eastern Outfitters, which will continue the restructured operations of Eastern Mountain Sports (EMS) and Bob’s Stores.  

Adhering to its company motto of “Quality Shopping Malls in Compelling Markets,” PREIT reached an agreement to sell the Washington Crown Center in Washington, Pennsylvania. At the same time, it announced it had put the Beaver Valley Mall up for sale.   In a press release, PREIT noted it had embarked on a portfolio optimization program focusing not just on new properties, but on new types of tenants that could fuel growth.  

Burlington Stores Inc. is upping its guidance for several key fiscal metrics in the second quarter of fiscal 2016.   The retailer now expects second quarter adjusted net income per share to total $0.28 to $.30, up from a previously announced range of $0.20-$0.23 per share and compared to $0.19 in the same period the previous year. Burlington Stores also currently anticipates adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the range of $88 to $90 million, compared to the prior year figure of $75.4 million.