More On Liquor Stores NA’s U.S. ExitNovember 21, 2017
Canada-based retail operator Liquor Stores NA announced yesterday that it would be selling off its interests in the lower 48 U.S. states to concentrate on its operations in Alberta, British Columbia and Alaska. According to the company, the move will reduce its long-term debt level by $37 million, with operating and administrative savings expected to nearly offset the net cash flow contributions of its U.S. assets. In the third quarter ended in September, Liquor Stores NA’s U.S. same-store sales were down 3% to $51 million.
Liquor Stores NA’s presence in the lower 48 has included stores in Kentucky, New Jersey and Connecticut. The company has agreed to sell its 15 Liquor Barn retail locations in Kentucky to local private equity group Blue Equity for around $26 million. That deal includes six locations in Louisville, six locations in Lexington, as well as stores in Danville, Bowling Green, and Elizabethtown. The Kentucky stores range in size from 2,700 square feet to 30,000 square feet, with a flagship store that is more than 44,000 square feet. Blue Equity is already active in Louisville’s beverage alcohol retail market through its investment in the two-store Party Mart chain.
Liquor Stores NA has also entered negotiations for the sale of its 51% interest in Birchfield Ventures LLC, which owns two Joe Canals Discount Outlet stores in New Jersey, for about $3 million. And it’s currently in discussions with a third party about the sale of its Wine and Beyond store in Norwalk, Connecticut. With those locations leaving the fold, the company’s U.S. presence will be limited to its 22 Brown Jug stores in Alaska.
The move to exit the lower 48 comes following a management shakeup at Liquor Stores NA this past summer. In July, former president and CEO Stephen Bebis left the company and was replaced by Kenneth Barbet, who formerly was CEO of both the Nova Scotia Liquor Corporation and Big Rock Brewery. Overall, Liquor Stores NA posted a 2.6% decline in sales to $450 million for the nine months through September, and recorded a net loss of $7 million.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.