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Dick’s Sporting Goods, Dollar General and Madison Reed are growing their store portfolios

June 24, 2020

• Retailers spent big on COVID-19-related safety measures in the first quarter, and there’s no sign of such expenses going away anytime soon. T-Mobile, for one, spent $50 million on additional cleaning supplies, and Walmart spent nearly $3 billion on increased salaries for frontline workers. Retailers also are hiring more staff like temperature takers and sanitation clerks. Many hired these “safety specialists” temporarily and now are making those hires permanent. Pandemic-related changes in consumer habits also are spurring retailers to hire more curbside delivery workers and “pickers” who select items for online shoppers.

RELATED: Tanger launches virtual shopping service

• Dick’s Sporting Goods is launching two discount concepts. This month, the retailer opened three Overtime by Dick’s Sporting Goods outlet stores, in Plainville, Connecticut; Hagerstown, Maryland; and Philadelphia. Overtime stores sell merchandise at as much as 75 percent off. The company also opened a Dick’s Sporting Goods Warehouse pop-up clearance store outside each Cleveland, Indianapolis, Milwaukee, Pittsburgh and St. Louis. The Warehouse stores sell merchandise at as much as 90 percent off, mostly marked-down goods from the retailer’s 726 full-price stores.

• Dollar General has grown its portfolio of some 16,000 stores throughout the pandemic. The retailer worked with brokerage firm Soloff Realty & Development to lease 12 freestanding stores in the Philadelphia metro area since February for an aggregate lease value of $18.6 million, according to the brokerage firm. The properties range from 7,000 square feet to 10,710 square feet.

• Madison Reed Color Bar opened its fourth salon in the Dallas area. The 1,470-square-foot unit, at Watters Creek at Montgomery Farm, is adhering to strict Centers for Disease Control and Prevention and social distancing guidelines. Sales of Madison Reed’s at-home hair color products soared at the peak of the pandemic, according to founder and CEO Amy Errett. “We are humbled that so many people turned to us, and to be able to open the doors to a new Color Bar speaks to a spirit of resilience all around us.” Madison Reed asks clients to come alone, wait outside, wear masks and, if they feel sick, stay home.

• The Children’s Place will close 300 of its 900 stores within two years. President and CEO Jane Elfers says online sales surged 300 percent while stores were closed. The company now wants to beef up its online operations. “We are dramatically reducing our reliance on our brick-and-mortar channel,” she said on an earnings call. “Entering 2022, our mall-based portfolio will represent less than 25 percent of our total revenue.” The company’s leases boast flexible terms, and 70 percent will come up for renewal by fiscal-year 2021. “This level of fleet flexibility on a fleet of our size is unique, and because of it, we can now significantly accelerate store closures without financial penalty,” she said.

• 24 Hour Fitness filed for Chapter 11 bankruptcy protection and plans to close 130 of its 430 gyms permanently. “If it were not for COVID-19 and its devastating effects, we would not be filing for Chapter 11," CEO Tony Ueber said. “We expect to have substantial financing with a path to restructuring our balance sheet and operations.” He also said the restructuring will enable reinvestment in existing clubs, opening of new clubs and introduction of innovative products and services. Gold’s Gym filed Chapter 11 in May and closed 30 of its 500 locations.

• Eighty-five-year-old vitamin and supplement retailer GNC Holdings Inc. will file for Chapter 11 bankruptcy protection and plans to close an additional 800 to 1,200 stores; last July, the company had announced plans to shutter approximately 900 stores. Under the terms of its agreement with lenders and shareholders, GNC will look for a buyer for $760 million. The company has secured $130 million in liquidity, including $100 million in debtor-in-possession financing and $30 million from modifications to an existing credit facility.

• Walmart is eliminating cashiers and checkout line conveyer belts from a Fayetteville, Arkansas, store to limit human interaction and help customers pay and leave faster. The company could expand the concept to more locations. In March, Walmart added a touch-free payment system to curb human contact. Customers can add credit cards and gift cards to the Walmart app and pay by holding their phones near wireless receivers at checkout kiosks.

• Supermarket chain Raley’s temporarily has repurposed a closed store in Sacramento, California, into an e-commerce fulfillment center. The company had planned to announce a new tenant for the closed store in April, when it opened a new store one block north. However, those plans changed due to COVID-19. Raley’s will restart negotiations with potential tenants once normal business operations resume.

By Brannon Boswell

Executive Editor, Commerce + Communities Today

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