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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

June23,2017

FungGlobalRetail&TechnologytracksstoreopeningsandclosuresforaselectgroupofUSretailers.

1) Thisweek,AmazonannounceditreachedadefinitiveagreementtoacquireWholeFoodsfor$13.7billion.

2) PrivateequityfirmSycamorePartnersisclosetoadealtoacquireUSofficesuppliesretailerStaples,accordingtoaReutersreport.

3) Bebewillreemergefrombankruptcyandsellthroughitse-commercechannelandinternationalphysicalstores,underthemanagementofGlobalBrandsGroup.

4) UKretailerSportsDirecthascompletedtheacquisitionofEasternOutfitters,leavingitwitharound50physicalstoresintheUS.

5) Year-to-date2017,thenumberofstoreclosureannouncementshasincreased218%yearoveryear,bringingthetotalnumberofstorestobeclosedto5,321,withmoretosurelyfollow.

Weekly Store Openings and Closures

Tracker #12: Amazon to Acquire

Whole Foods

Deborah Weinswig

Managing Director,

Fung Global Retail & Technology

deborahweinswig@fung1937.com

US: 917.655.6790

HK: 852.6119.1779

CN: 86.186.1420.3016

2

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

June23,2017

2017StoreOpeningsandClosuresWhatishappeningthisweek?Itsurelyhasbeenabusyweekfore-commercegiantAmazon.ThecompanyannouncedithasreachedadefinitiveagreementtoacquireWholeFoodsina$13.7billioncashdeal,whichhassentshockwavesthroughthemarketandtheretailindustry.PrivateequityfirmSycamorePartners,whichspecializesinretailandconsumerinvestments,isclosetoadealtoacquireUSofficesuppliesretailerStaples.Meanwhile,BebeandEasternOutfittershavebothreemergedfromtheirrespectiveChapter11proceedings:Bebewillcontinuetooperateonlinethroughitse-commerceplatform,whileEasternOutfitterswillhavearound50physicalstoresintheUSundertheBob’sStoresbrandandEasternMountainSportsbrand.AmazontoAcquireWholeFoodsAmazonannouncedithasreachedadefinitiveagreementtoacquireWholeFoodsMarket,ahigh-endgrocery-storechain,for$13.7billionincash.Theacquisitioncomesatadifficulttimeforphysicalretailers,however,manyseethecurrentenvironmentasanopportunityfore-commerceplayerstomoveoffline.AssumingthatnochangesaremadetoWholeFoods’storefleet,Amazonwilladdover460WholeFoodsgrocerystorestoitslistofphysicalstores.Accordingtoourestimates,thecombinedAmazon-WholeFoodsentitywouldaccountforaround3%oftheUSgrocerymarket.Thetransactionisexpectedtocloseinthesecondhalfof2017,pendingapprovalbyWholeFoods’shareholdersandregulatorybodies.PrivateEquityFirmSycamorePartnersClosetoAcquiringStaplesPrivateequityfirmSycamorePartnersisinadvancestagesofdiscussionswithUSofficesuppliesretailerStaplesforadealthatwillseetheretailergoprivate.Thedealcouldbeworthasmuchas$6billion,accordingtoreportsfromReuters.Stapleshasover1,200storesintheUSandaround300inCanada.Noofficialcommenthasbeenmadebyeitherparty,asthedealnegotiationsarestillunderwayprivately.BebeE-CommercePlatformReemergesBebewillonceagainbesellingonitse-commerceplatformjustafewmonthsafteritdeclaredbankruptcy.Thetransformede-commerceplatform,withinternationalbrick-and-mortarstores,willbeoperatedbyGlobalBrandsGroup.Thereemergedbrandwillcontinuetofocusonchicwomen’sfashion,whichhasalwaysbeenthedifferentiatingfactorofthebrand.SportsDirectCompletesAcquisitionofEasternOutfittersPursuanttoourearlierreport,UKretailerSportsDirecthasnowcompletedtheacquisitionofEasternOutfitters,whichoperatesundertheBob’sStoresbrandandEasternMountainSportsbrand.50physicalstoresintheNortheasternUS,fiveEasternMountainSportsoutdooradventureschoolsandcorrespondingwebsiteswillbeoperatedbythenewowner.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

June23,2017

Year-to-Date 2017 Major US Store Closure Announcements

Gymboree announced itwould be closing 350-450 stores.Ralph Lauren’s store closing numberwas part of the 50-store closure planannounced in June 2016.Paylesswill close an additional 296 stores if negotiationswith landlords are unsuccessful.Ascenawill closebetween268and667storesbyJuly2019,dependingonnegotiationwithlandlords.Source:Companyreports/FungGlobalRetail&Technology

32364044506068

1007070

100101110120138160171180190

220226250

400400

450512

1000

0 200 400 600 800 1000 1200

GanderMountainEasternOueifers

lululemonathlegcaLucyAcgvewear

Chico’sGuess

MCSportsMacy’s

CVSStaples

MichaelKorsGordmansStoresInc.

AmericanApparelBCBG

JCPenneyCrocsInc.WetSeal

BebeStoresIncGameStophhgregg

SearsandKmartTheLimited

AscenaRetailRue21

GymboreePaylessIncRadioShack

Total: 5,321 announced store closures

218% year over year

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

June23,2017

Year-to-Date 2017 Major US Store Opening Announcements

Aldiwillcompletea400-storeexpansionbytheendof2018.Walmart’stargetof59storesincludesnew,expandedandrelocatedstores.Targetisonlyopeningstoresinsmallformat.Macy’sBackstagewillbeopenedwithinexistingfull-lineMacy’sstores.Source:Companyreports/FungGlobalRetail&Technology

10

17

19

20

24

30

52

59

60

60

70

90

100

100

100

111

400

650

1,290

0 200 400 600 800 1,000 1,200 1,400

Forever21(RileyRose)

Nordstrom

Macy'sBackstage

Bonobos

Costco

Target

Dick’sSporgngGoods,Inc.

Walmart

HobbyLobby

H&M

Sephora

RossStores

Lidl

Ulta

FiveBelow

TJX

Aldi

DollarTree

DollarGeneral

Total: 3,262 announced store openings

53% year over year

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

June23,2017

2016StoreOpeningsandClosures

2016 Major US Store Closures

Source:Companyreports/FungGlobalRetail&Technology

2016 Major US Store Openings

Source:Companyreports/FungGlobalRetail&Technology

9

18

18

26

34

34

48

71

123

154

200

233

243

463

0 50 100 150 200 250 300 350 400 450 500

JCPenney

FinishLine

Kohl’s

AmericanEagle

TheChildren’sPlace

Chico’sFAS

Staples

Gap

OfficeDepot

Walmart

Walgreens

Men’sWarehouse/JosA.Bank

SearsandKmart

SportsAuthority

10

15

19

19

45

53

72

79

93

104

146

584

900

0 100 200 300 400 500 600 700 800 900 1,000

Zara

Target

UnderArmour

Costco

Aldi

H&M

Sephora

Dick’sSporgngGoods

RossStores

Ulta

TJX

DollarTree

DollarGeneral

Total: 1,674 announced store closures

Total: 2,139 announced store openings

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

June23,2017

DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comKirilPopovSeniorAnalyst

EsmePauAnalyst

MatthewLeeResearchAssistantHongKong:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406London:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NewYork:1359Broadway,18thFloorNewYork,NY10018Tel:6468397017FungGlobalRetailTech.com