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7-Eleven Owner Rejects Couche-Tard’s Takeover Bid

Photo: 7-Eleven

Seven & i Holdings, the Japanese parent company of convenience store chain 7-Eleven, has rejected a US$38.6 billion takeover offer from Canadian retail giant Alimentation Couche-Tard. The proposal was deemed to undervalue the company and carry significant regulatory risks.

In a letter made public on Friday, Stephen Dacus, head of Seven & i’s special committee, outlined the reasons for rejecting the bid. Couche-Tard’s all-cash offer of US$14.86 per share, equivalent to about 5.5 trillion yen, was considered “opportunistically timed” and insufficient.

Despite the rejection, Seven & i left the door open for future negotiations. Dacus stated they would consider proposals that fully recognize the company’s stand-alone intrinsic value and address regulatory concerns in the current environment.

Image: 7-Eleven Canada

Laval, Quebec-based Couche-Tard, which operates about 17,000 stores in 31 countries including the Circle K brand, has long sought to acquire its Japanese rival. The proposed deal would create the world’s fourth-largest retailer, behind only Walmart, Amazon, and Costco.

Seven & i operates 86,000 stores across Japan, the United States, and other Asian nations. In Canada, the company has a growing presence, with stores in several provinces. The 7-Eleven brand remains popular in Japan, serving as a vital part of daily life for many consumers.

The takeover bid faces significant hurdles in the United States, where both companies have substantial operations. Seven & i expressed concerns about Couche-Tard’s lack of detailed plans for addressing potential antitrust issues. Analysts estimate that over 1,000 stores might need to be divested to satisfy regulators.

Photo: Couche-Tard

Seven & i’s shares on the Tokyo Stock Exchange reacted to the news, trading at 2,133.5 yen (US$14.92) on Friday, down 1.4 percent. However, the stock has generally maintained gains since the takeover approach was first disclosed on August 19.

Industry experts anticipate that Couche-Tard may return with an improved offer. CEO Alex Miller expressed confidence in financing and completing the takeover, stating, “We look forward to engaging with Seven & i constructively.”

The outcome of this potential deal would significantly expand Couche-Tard’s global footprint and potentially reshape the convenience store industry worldwide.

PHOTO: CIRCLE K

Seven & i recently announced a restructuring plan to strengthen its U.S. operations and streamline its Japanese business. The company closed some Ito-Yokado supermarkets in Japan and sold its Sogo & Seibu department stores to Fortress Investment Group for US$1.5 billion last year.

In its latest financial report, Seven & i reported an annual profit of 224 billion yen (US$1.6 billion), down 20 percent from the previous year, while annual sales slipped nearly three percent. Despite these challenges, the company remains a dominant force in the global convenience store market.

The potential acquisition would combine Couche-Tard’s strong North American and European presence with Seven & i’s dominance in Asia. This would create a retail powerhouse with annual revenue exceeding US$150 billion and more than 100,000 stores worldwide.

VIDEO: Retail and food presence grows at Spruce Meadows

After close to 50 years, Spruce Meadows, just south of Calgary, has grown into an internationally-renowned equestrian facility.

Spruce Meadows is wholly owned and operated by the Southern Family.

“The dream of the Southern Family from the start was to create a unique environment of “good friendship, good commerce, and good sport”. This dream has been shared from its genesis by a committed group of corporations, volunteers, media, athletes, staff, fans, and officials. Together these stakeholders have shaped the dream and built a most memorable place,” says the organization.

But the massive facility is more than just horses.

Retail Insider caught up with Linda Southern-Heathcott, President of Spruce Meadows, during the annual Masters tournament to discuss how it has evolved over the years into a dining, shopping and entertainment destination.

Southern-Heathcott talks about the growing number of vendors that are now selling their products during tournaments at the marketplace, the growing number of food offerings and the opening next year of a fine dining restaurant on the site.

Pet Valu opens distribution centre in Surrey B.C. (Photos)

Photo courtesy of Pet Valu

Pet Valu Holdings Ltd., the leading Canadian specialty retailer of pet food and pet-related supplies, announced Friday  the official opening of its 350,000-square-foot, LEED-gold certified distribution centre in Surrey, British Columbia.

The company said the Surrey DC is three times the size of Pet Valu’s existing warehouse in the province and a key component of Pet Valu’s over $100 million supply chain transformation. It said the new facility unlocks the company’s continued growth in Western Canada while providing enhanced service to existing stores in the region.

Photo courtesy of Pet Valu
Richard Maltsbarger

“Our new Surrey DC represents the second pillar of our supply chain transformation, and another key achievement of our cross-functional teams, whose careful balance of rigourous planning and iterative learning have kept this multi-year project on time and on budget,” said Richard Maltsbarger, Chief Executive Officer of Pet Valu

“This new facility embodies Pet Valu’s commitment to Our Four Paws service model, designed to emphasize safety, compassion, expertise and efficiency. Following several years of heightened investments, we are now entering the final stretch of our transformation, after which we will have Canada’s strongest pet specialty distribution network as the backbone to propel Pet Valu’s continued profitable growth over the next decade.”

The company said the Surrey DC is the second largest pet specialty distribution centre in Canada, exceeded only by Pet Valu’s own 670,000-square-foot distribution centre in Brampton, Ontario and brings up to 150 skilled jobs to Surrey. 

“Similar to the GTA DC, the Facility utilizes an advanced warehouse management system, and modernized machine handling equipment, safety systems and security systems. Additional features include ample wellness space to support the diverse needs of its employees, including a meal room, training space, a driver’s lounge, prayer and ablution rooms, and first aid facilities,” said Pet Valu.

“As part of the company’s ongoing pursuit to optimize energy and emissions management, the Surrey DC will pilot the use of two electric trucks as part of its delivery fleet. Each electric delivery truck represents an opportunity to avoid consumption of over 25,000 litres of diesel fuel per year.

Photo courtesy of Pet Valu

Pet Valu said it expects the Surrey DC to be fully operational by the fourth quarter of 2024, as it scales down use and exits its legacy distribution centre and third-party storage space in the Metro Vancouver Region in the coming months. It said the facility is currently receiving and shipping all products through advanced manual processes with implementation of automation of its piece-pick operations intended for 2026 or thereafter.

Nico Weidel

“Pet Valu continues to set a high bar for pet specialty distribution capabilities in Canada,” said Nico Weidel, Chief Supply Chain Officer at Pet Valu. “The advanced, modern processes and systems at each of our new distribution centres provide improved product availability, faster order processing, and enhanced customer service levels for stores and eCommerce customers alike in a safe, spacious environment that supports the needs of our modern workforce. 

“As we finalize our transitions in the Greater Toronto and Metro Vancouver regions, we will soon shift our focus to our final distribution hub in Calgary and completion of our supply chain transformation in 2025.”

Pet Valu is Canada’s leading retailer of pet food and pet-related supplies with over 800 corporate-owned or franchised locations across the country. 

It has been in business for more than 45 years.

Photo courtesy of Pet Valu
Photo courtesy of Pet Valu
Photo courtesy of Pet Valu
Photo courtesy of Pet Valu

Happy Belly Food Group Acquires 100% of iQ Foods Co.

Photo courtesy of Happy Belly Food Group

Happy Belly Food Group Inc., a leading consolidator of emerging food brands, announced Friday that it has acquired 100 per cent of Toronto-based QSR brand iQ Foods Co. and all four iQ Foods locations following iQ’s filing for creditor protection recently.

iQ Foods offers a variety of wholesome options like healthy bowls, smoothies, sandwiches, soups, and salads, along with other flavourful clean-eating dishes.

“Today, we are pleased to announce the 100 per cent acquisition of iQ Foods. Alongside our wholly owned Lettuce Love Café brand, and our binding acquisition agreement for Salus Fresh Foods announced on July 29th, we are taking our first steps in executing the next phase of our business strategy by consolidating emerging brands within sectors, in addition to developing emerging brands,” said Sean Black, Chief Executive Officer.

Photo courtesy of Happy Belly Food Group

“This is a key moment in our company’s growth as we embark on consolidating sectors, starting with the premium healthy and clean eating vertical. This approach aligns with our strategy, targeting a growth sector that is gaining market share and share of wallet amongst consumers, especially among health-conscious consumers in parts of Canada and the US.

“We see inspiration in category leaders like Sweetgreen in the US, which has grown significantly in business, store count, and achieved an impressive market cap of over $3.5 billion USD, not unlike how CAVA accelerated its expansion in the Mediterranean category by acquiring Zoe’s Kitchen. Our acquisition of iQ Foods establishes our Happy Belly platform as a strong foundation for our sector consolidation strategy.”

Happy Belly said iQ Foods is a cornerstone brand in Canada’s premium healthy eating market and represents the largest single acquisition of corporate-owned stores that Happy Belly has made to date.

Photo courtesy of Happy Belly Food Group

“Strategically situated in urban and central business districts, iQ Foods serves the needs of thousands of customers who are focused on health and wellness from local businesses while also expanding into catering services, which generates additional revenue in major metropolitan centres. This approach has built strong brand awareness and a loyal customer base through word-of-mouth and most importantly, happy and satisfied customers.”

As part of the acquisition Happy Belly takes ownership of four downtown Toronto locations: 100 King Street West (First Canadian Place); 18 York Street (Financial Centre); 199 Bay Street (Equinox Gym and Fitness Center); and 55 Avenue Road (Yorkville Equinox Gym and Fitness Center). A location at Toronto’s Yorkdale Shopping Centre recently closed with a creditor protection filing.

“With our current and prospective new locations, we aim to grow and scale iQ Foods operations into 2025 and beyond. Our Happy Belly footprint continues to grow with each M&A transaction and every new store opening. With the iQ Foods acquisition, we will have 36 restaurants operating within the Happy Belly portfolio, which will increase to 45 following the closing of the Salus Fresh Foods acquisition. Additionally, five of our brands currently have one or more locations under construction, significantly boosting our organic growth. This combination of accelerated organic and inorganic growth positions us well for continued expansion. We look forward to announcing several new openings throughout 2024 as we continue to sign franchise agreements and secure prime real estate locations for our franchisees across Canada,” added Black.

Anatomy of a Leader: James McInnes, Co-Founder & CEO, Odd Burger

James McInnes

James McInnes founded Odd Burger in 2014 as a grassroots vegan organization that brought organic fruit and vegetables from local farmers to customers’ doorsteps. 

The idea began percolating in his mind while he was running a software company.

He was born and raised in London, Ontario, and went to the University of Western Ontario taking genetics and computer science.

James McInnes

“I’ve always been like a scientist I guess,” said McInnes. “I always found that field of quantitative scientific methods and processes to be really cool, really interesting, especially in the computer science side, with an emphasis on the life sciences.

“After I got my degree I ended up starting a software company and ran that for seven years or so before I left and started this company. It’s always been a passion of mine science and life sciences.”

His first company was a fintech firm. 

“While I was still running my software company I went vegan for health reasons. I was diagnosed with high blood pressure when I was about 32. I thought I was leading a fairly healthy life. I didn’t eat a lot of fast foods. I was eating what I thought was a balanced diet and fairly unprocessed,” he said. 

“But it still led me to have some serious life implications. I went plant-based just to try it for 30 days and it completely reversed my high blood pressure which was shocking to me that in 30 days you could change your diet and you can have such a drastic impact on your health. The doctors were pretty amazed too.

“At the time, going vegan was such an extreme diet. People were asking how do I get my protein. I was going to die. I couldn’t live like this. A lot of misconceptions at that time. It started as me on a personal health journey. I ended up buying fruits and vegetables in bulk and I ended up starting a buying group with friends and family.”

He partnered with Vasiliki McInnes in 2015 and the couple developed vegan meal kits, through which they learned that people loved their vegan fast food recipes.  

In 2016, Odd Burger brought what is now known as the Famous Burger to the London, Ontario Ribfest where it sold out due to overwhelming demand.  

The popularity of this vegan option made waves and the disruption garnered great media attention throughout North America. The food truck was launched soon thereafter which brought vegan fast food to communities across Ontario and where customers came out in droves. 

Image: Odd Burger

 In 2017, the company launched Canada’s first vegan fast-food restaurant. Six months later, they opened the world’s first 24-hour vegan drive thru. Odd Burger opened its own manufacturing centre in 2018, where food is produced, and research and development take place. 

In August the company, in its third quarter financial results, said it was expecting to open an additional six units in Canada before year end, bringing the total number of expected units operational to 23.

The perceptions of being a vegan have changed over the years.

“It’s becoming mainstream much more so than it was. I remember never even seeing the word vegan or plant-based. You rarely saw it at restaurants. You rarely saw any vegan offerings whatsoever. It just wasn’t on the radar because no one was eating that way whatsoever,” said McInnes. 

“I think we’re starting to see kind of a shift, the same way cannabis has shifted from being just for the hippies to now lots of people doing it for lots of different reasons . . . And it’s gone mainstream . . . I think the same thing where plant-based has gone through the same type of transition. The industry itself is massive and the potential is huge.”

McInnes said today he’s 44 years old but feels like he’s in his 20s with lots of energy. 

When asked about his entrepreneurial success, he said: “Perseverance was the number one thing because every business is going to have its ups and downs. Sometimes the downs can last for years. You have to be able to persevere through those hard times to sort of see the good times, sometimes.

“There’s this kind of ebb and flow that you have to get used to. You’re going to have failures. You’re going to have setbacks. You’re going to have challenges. You’re going to have times when you don’t think you’re going to make it through. At the end of the day, remember why you’re doing it and what are the reasons you’re doing it. As long as that reason is in the right place. It’s because you love what you do, you’re passionate about it, you believe in the importance of doing what you’re doing for the world, I think that helps you stick with it.”

McInnes said as an entrepreneur it’s important to be able to manage a company’s growth which many don’t think about.

“I think the real challenges and the difficulties come in the growth . . . Every single step of growth has challenges you have to be able to get through.”

In his spare time, he plays tennis and swims. He’s also a musician, working on a musical about the story of Odd Burger, coining it Odd Way on Broadway. He plays violin while his wife plays keyboard, drums and flute.

“I think creative outlets are great,” added McInnes, who played violin in different orchestras as a youth. 

North West Company Boosts Dividend Amid Strong Q2 Performance

Northern Store in Moosonee. Photo: Northwest Company

The North West Company, a major retailer serving rural and urban communities across Canada and internationally, announced second-quarter results for the period ending July 31, 2024. The company, which operates 229 stores under various banners, reported a 4.6% increase in consolidated sales, reaching $646.5 million.

Given the strong numbers, North West’s Board of Directors declared a quarterly dividend of $0.40 per share. It’s a 2.6% increase from the previous quarter.

Dan McConnell, President and CEO of the North West Co., said, “We are very pleased with the results this quarter, delivering increases in adjusted EBITDA and adjusted net earnings compared to a strong second quarter last year.”

Giant Tiger Store (Image: Giant Tiger)

The company’s Canadian operations led the charge, with same-store sales increasing by 6.8%. This growth helped offset more modest gains in International Operations, which saw a 0.9% increase in same-store sales.

North West’s gross profit rose by 7.5% to $219.8 million, bolstered by sales gains and a 91 basis point improvement in gross profit rate. The company attributed this increase to changes in sales blend and a reduction in markdowns.

However, the retailer faced challenges in the form of increased expenses. Selling, operating, and administrative costs rose by 10.1% compared to the previous year, primarily due to inflationary pressures and higher wage costs.

Despite these headwinds, North West’s earnings before interest, income taxes, depreciation, and amortization (EBITDA) grew by 4.1% to $83.4 million. Adjusted EBITDA, which excludes certain non-comparable expenses, increased by 6.1% to $88.4 million.

The company’s net earnings saw a slight decrease of 3.0% to $36.9 million, partly due to the impact of new tax legislation. The Global Minimum Tax Act, enacted in Canada on June 20, 2024, resulted in a $1.0 million increase in income tax expense for the quarter.

Looking ahead, McConnell expressed optimism about the company’s direction. “We are building a strong foundation through our focus on operational excellence initiatives and the momentum in our Canadian business,” he noted. 

The North West Company maintains a significant presence in Canada, with additional operations in Alaska, the South Pacific, and the Caribbean. The company’s diverse portfolio includes stores operating under banners such as Northern, NorthMart, Giant Tiger, Alaska Commercial Company, Cost-U-Less, and RiteWay Food Markets.

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Long & McQuade Founder Jack Long Dies at 95

Jack Long at the opening of Long & McQuade in Belville, ON, in 2016. Photo: intelligencer.ca

Jack Long, founder of Canada’s largest music retail chain Long & McQuade, has passed away at the age of 95. The company announced his passing on September 4, 2024.

Long’s journey from professional trumpet player to retail magnate began in 1956. With a music degree from the University of Toronto, he opened a small instrument shop on Carlton Street in Toronto.

The business quickly expanded, with Long adding practice studios for music lessons. This decision led to a fateful partnership with drummer Jack McQuade, who rented space for drum lessons.

In 1957, the two musicians joined forces to open Long & McQuade Musical Instruments on Yonge Street. The partnership lasted until 1965 when McQuade sold his share to Long to focus on drumming.

Jack Long memorial. Image via Long & McQuaid

Long & McQuade’s expansion across Canada began in 1968. Today, the company boasts over 100 stores nationwide and an online presence launched in 2008. It employs more than 1,800 musicians and contracts about 1,000 music teachers.

The company’s impact on Canadian music has been significant. Notably, Rush‘s late drummer Neil Peart purchased his first drum kit – a chrome Slingerland set – from a Toronto Long & McQuade store.

Long’s contributions to Canada’s music industry were recognized in 2014 when he was appointed to the Order of Canada. He was honoured for his pioneering role in the country’s music retail sector and his commitment to musicians, customers, and employees.

A Long & McQuade store. Photo: Long & McQuade

While the Long family continues to own the business entirely, Jack’s sons Steve and Jeff now manage daily operations. Jack remained involved as an advisor until his passing.

The Long family expressed pride in Jack’s legacy, stating, “Jack lived a long and happy life, surrounded by music and family until the very end. We will miss him every day.”

Long & McQuade’s website offers a wide range of services, including instrument sales, rentals, repairs, and music lessons. The company’s non-commissioned sales approach and performance warranty program have contributed to its enduring success in the Canadian music retail landscape.

Rennaï debuts 1st location at Montreal’s Royalmount

Rennaï, a new beauty and self-care retailer is now open at ROYALMOUNT in Montreal, Canada (CNW Group/Rennaï)

Multi-brand beauty and self-care retailer Rennaï has opened its first ever location at Royalmount in Montreal. 

This launch marks the beginning of Rennaï’s ambitious North American expansion plan. The retailer aims to open several stores across the continent over the next five years.

Christopher Novak

Rennaï’s 36,000-square-foot Royalmount space, designed by renowned interior designer Ana Borrallo, offers a unique shopping experience. The store features a curated selection of local, national, and global beauty products in a breathtaking environment. 

Christopher Novak, President and CCO of Rennaï, said,” Opening our first location in Canada with unique offerings in a state-of-the-art facility marks a pivotal moment in beauty and self-care evolution.”

The store is divided into five distinct “realms,” each catering to different aspects of self-care:

  1. The Reimagine Realm focuses on makeup artistry.
  2. The Refresh Realm is dedicated to fragrance exploration.
  3. The Revitalize Realm offers supplements and personal care products.
  4. The Rejuvenate Realm specializes in skincare and houses a medical aesthetic clinic.
  5. The Retreat Realm provides a relaxation space and pampering services.

Rennaï currently showcases over 175 brands, with plans to introduce more exclusive and first-to-market concepts throughout the year. The company aims to set new industry standards by educating customers and helping them develop personalized beauty routines.

Royalmount in Montreal. Photo supplied by Carbonleo

Royalmount boasts an impressive array of 170 stores and 60 restaurants and cafes. Half of these retail concepts are new to the market, offering shoppers a fresh and diverse selection of brands and experiences. About 50 retailers opened on the September 5 opening day.

Notably, Royalmount houses the largest concentration of luxury stores in Quebec. The positioning establishes the complex as a destination for high-end shopping in the province.

Beyond retail, Royalmount embraces green spaces and art. The complex features a 77,000 square foot urban park, providing a natural oasis amidst the bustling shopping environment. Additionally, art enthusiasts can explore a public art trail showcasing over 60 installations from both local and international artists.

Royalmount in Montreal – Louis Vuitton and Tiffany & Co. will open in several months. Photo supplied by Carbonleo

Sustainability is at the forefront of Royalmount’s design and operations. Developed by real estate company Carbonleo, the complex is on track to become Canada’s largest LEED Gold retail project. This commitment to environmental responsibility sets a new standard for retail developments in the country.

One of Royalmount’s most innovative features is its climate-controlled enclosed skybridge. The $50 million structure directly connects the complex to Montreal’s metro and public transit system, encouraging eco-friendly transportation options for visitors.

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Innovative Beauty Hall and Wellness Retail Concept to Open at Royalmount in Montreal [Interview/Rendering]

RENNAÏ announces Canadian retail exclusive with Victoria Beckham Beauty

Royalmount Opens in Montreal

Costco Breaks Ground on 4th Winnipeg Location

US-based membership-only big-box warehouse club Costco Wholesale has begun construction on its fourth store in Winnipeg. The new location will be at 4077 Portage Avenue near Assiniboia Downs on the western edge of the city.

The City of Winnipeg issued Costco a development permit in July for the construction of a 166,894-square-foot store. Work on the site, currently an open field, commenced several days ago.

The new Portage Avenue location will be part of the growing Westport mixed-use development, spanning over 15 acres. The project, approved by city councillors last year, includes plans for a one-story building and parking lot. Renderings from June 2023 also indicate the addition of a gas bar at the site.

4077 Portage Avenue in Winnipeg. Click image for interactive Google Map

The new store will join Winnipeg’s existing Costco locations on St. James Street, Regent Avenue West, and McGillivray Boulevard. 

Costco has a significant economic footprint in Canada, where it serves over 10 million members and generates average annual sales of about CDN$25 billion.

Background on Costco

Costco’s journey began in 1976 when Sol Price introduced the first membership warehouse club, Price Club, in San Diego, California. Initially limited to business members, Price Club offered a wide range of supplies and wholesale items. Jim Sinegal, a key figure in Price Club’s success, later co-founded Costco Wholesale with Jeff Brotman in 1983, opening their first warehouse in Seattle, Washington.

The merger of Price Club and Costco Wholesale in 1993 created a powerhouse in the retail industry. The company today carefully selects about 4,000 stock keeping units (SKUs) per warehouse, significantly fewer than the 30,000 found in most supermarkets, allowing them to offer the best value to members.

As of August 2024, Costco operates 884 warehouses worldwide, with a significant presence in North America. The company has 611 locations in the United States and Puerto Rico, 108 in Canada, and 40 in Mexico. Its global footprint extends to countries such as Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden.

Costco’s financial performance remains strong, with net sales reaching US$210.55 billion for the first 44 weeks of 2024. The company’s success has earned it the 11th spot on the Fortune 500 rankings of the largest United States corporations by total revenue.

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