Weekly Store Closures Tracker #17: Michael Kors Buys

July 28, 2017

Weekly Store Openings and Closures Tracker #17: Michael Kors Buys

Jimmy Choo

Deborah Weinswig Managing Director FGRT

deborahweinswig@ US: 917.655.6790 HK: 852.6119.1779

CN: 86.186.1420.3016

Fung Global Retail & Technology tracks store openings and closures for a select group of US retailers.

1) We forecast that announced store closures will total 9,452 by the end of 2017, exceeding the 6,164 stores closed in 2008. The 5,442 store closures announced year to date are tracking at 59% of our full-year forecast. The forecast for 2017 also represents a year-over-year increase of 361%.

2) This week, Michael Kors announced the acquisition of Jimmy Choo for $1.2 billion.

3) Iconic Brand Group acquired the remaining 50% stake in Iconic Canada for $19 million.

4) TJX is opening five HomeSense stores, its new off-price home fashions concept.

5) Year-to-date 2017, the number of store closure announcements has increased 162% year over year, bringing the total number of stores to be closed to 5,442, with more to surely follow.

Deborah Weinswig, Managing Director, FGRT deborahweinswig@ US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016

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Copyright ? 2017 The Fung Group. All rights reserved.

July 28, 2017

2017 Store Openings and Closures

What Is Happening This Week? No major store closure announcements were made this week, but the retail industry is bracing for another blockbuster acquisition. Michael Kors announced the acquisition of Jimmy Choo for $1.2 billion, a response to Coach's recent acquisition of Kate Spade. Meanwhile, Iconic Brand Group acquired the remaining 50% stake it did not already own in Iconic Canada. To cap off the week, TJX will be opening a new off-price home fashions concept, HomeSense, with five stores in the pipeline for this year.

Michael Kors Acquires Jimmy Choo Michael Kors has agreed to acquire Jimmy Choo, a luxury footwear brand, for $1.2 billion. The deal came at a time when Michael Kors is facing a downturn of business with declining sales and store closures. With the purchase of Jimmy Choo, Michael Kors plans to expand beyond its own brand name for the first time and establish a presence in the luxury footwear market. The acquisition is also seen as a response to Coach's acquisition of Kate Spade, with both luxury retailers striving to diversify and expand internationally.

Iconic Brand Group Acquires Remaining 50% Stake in Iconic Canada Iconic Brand Group acquired the remaining 50% stake in Iconic Canada from its joint-venture partner in a deal worth $19 million. The acquisition fits well with Iconic's international expansion strategy, as the company eyes further penetration into the Canada market. Brands licensed with Iconic include London Fog, Ecko Unltd and Danskin, among others.

TJX Opens New Off-Price Concept Store HomeSense TJX is opening a new off-price home fashions concept in the US called HomeSense. Five stores are currently in the pipeline before the end of the year, with the first HomeSense store opening in Framingham, Massachusetts in August. TJX believes the home fashions market has shown positivity in a relatively bleak retail environment, and is determined to fully capitalize on the momentum by bringing the already-popular brand in Europe and Canada to the US market.

Deborah Weinswig, Managing Director, FGRT deborahweinswig@ US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016

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Copyright ? 2017 The Fung Group. All rights reserved.

July 28, 2017

Year-to-Date 2017 Major US Store Closure Announcements

RadioShack Payless Inc

Rue 21 Ascena Retail

Gymboree Sears and Kmart

The Limited hhgregg

GameStop Bebe Stores Inc

Wet Seal Crocs Inc. JCPenney

BCBG American Apparel Gordmans Stores Inc.

Michael Kors Macy's Staples CVS Aaron's

MC Sports Alfred Angelo

Guess Chico's Lucy Achvewear lululemon athlehca Eastern Oufigers Gander Mountain True Religion Ralph Lauren

400 400 350 289 250 220 190 180 171 160 138 120 110 101 100 100 70 70 70 68 61 60 50 44 40 36 32 27 23

0

200

400

512 600

1000

5,442 Total:

announced store closures

165%

year over year

800

1000

1200

Gymboree announced it would be closing 350?450 stores. Ralph Lauren's store closing number was part of the 50-store closure plan announced in June 2016. Payless will close an additional 296 stores if negotiations with landlords are unsuccessful. Ascena will close between 268 and 667 stores by July 2019, depending on negotiations with landlords. Source: Company reports/FGRT

Deborah Weinswig, Managing Director, FGRT deborahweinswig@ US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016

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Copyright ? 2017 The Fung Group. All rights reserved.

July 28, 2017 Year-to-Date 2017 Major US Store Opening Announcements

Dollar General Dollar Tree Aldi TJX Five Below Ulta Lidl Ross Stores Sephora H&M

Hobby Lobby Walmart

Dick's Sporhng Goods, Inc. Target Costco

Bonobos Macy's Backstage

Nordstrom Forever 21 (Riley Rose)

ThredUP Homesense

Fendi

111 100 100 100 90 70 60 60 59 52 30 24 20 19 17 10 5 5 3

0

200

650 400

1,290

3,275 Total:

announced store openings

53%

year over year

400

600

800

1,000

1,200

1,400

Aldi will complete a 400-store expansion by the end of 2018. Walmart's target of 59 stores includes new, expanded and relocated stores. Target is only opening stores in small format. Macy's Backstage will be opened within existing full-line Macy's stores. Source: Company reports/FGRT

Deborah Weinswig, Managing Director, FGRT deborahweinswig@ US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016

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Copyright ? 2017 The Fung Group. All rights reserved.

2016 Store Openings and Closures

2016 Major US Store Closures

July 28, 2017

Sports Authority Hancock Fabrics Sears and Kmart Men's Warehouse/Jos A. Bank

Aeropostale Walmart

Office Depot Gap

Walgreens Wolverine World Wide

Ralph Lauren Staples

Chico's FAS The Children's Place

American Eagle Kohl's

Finish Line JCPenney

71 67 51 50 48 34 34 26 18 18 9

0

50 100

154 154 123

150 200

463 255 243 233

2,051 Total:

announced store closures

250 300 350 400 450 500

Source: Company reports/FGRT

2016 Major US Store Openings

Dollar General Dollar Tree TJX Ulta Ross Stores

Dick's Sporhng Goods Sephora H&M Aldi Costco

Under Armour Target Zara

146 104 93 79 72 53 45 19 19 15 10

900 584

2,139 Total:

announced store openings

0

100

200

300

400

500

600

700

800

900 1,000

Source: Company reports/FGRT

Deborah Weinswig, Managing Director, FGRT deborahweinswig@ US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016

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Copyright ? 2017 The Fung Group. All rights reserved.

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