Walmart sets the stage for e-commerce growth
Walmart’s online results for the fourth quarter spooked investors, but the discounter is confident that it will regain momentum this year.
Walmart reported a 23% increase in online sales for the quarter, compared to a 50% increase in the previous quarter. The chain said part of the decline was expected as sales growth on Jet.com, which it acquired in 2016, cooled. It also cited operational snags.
Despite the disappointing results, Walmart is well poised for future online growth and expects e-commerce growth of 40% in its current fiscal year. It is planning a number of investments in its website and overall digital operations that should start to take hold later this year, CNBC reported.
The upcoming initiatives include a revamped website with a focus on fashion and home goods. The site will also feature Jet.com’s “smart cart” technology, which provides shoppers cheaper prices if they pack more items together in one box, use a debit card when paying for purchases or opt out of returns, the report said.
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Tops Markets files for Chapter 11 bankruptcy protection
In an effort it said is directed at reducing its debt load, Tops Markets on Wednesday filed for Chapter 11 bankruptcy protection as part of a financial restructuring. The Williamsville, N.Y.-based operator of 169 supermarkets and five franchise stores said that it has received sufficient funding to keep it liquid enough to support its operations as it completes a restructure.
Tops said that the operations would be funded through a $125 million debtor-in-possession term loan financing facility from certain noteholders, as well as $140 million DIP asset-based revolving loan from Bank of America. The company expects to receive court approval to use these funds to support operations as it completes a court-supervised restructuring process. Tops also said that it intends to pay vendors and suppliers in full under normal terms for goods and services provided after the filing.
“We believe the financing that we received from our noteholders is a vote of confidence in our business,” Tops CEO Frank Curci said. “Our operations are strong and we have an outstanding network of stores and a talented team to support them. We are now undertaking a financial restructuring, through which we expect to substantially reduce our debt and achieve long-term financial flexibility. This will enable us to invest further in our stores, create an even more exceptional shopping experience for our customers and compete more effectively in today’s highly competitive and evolving market.”
In the company’s filing, FTI Consulting senior managing director Michael Buenzow, who the company retained in December, cites among the challenges facing Tops roughly $450 million in incremental debt that it took on as part of its acquisition by Morgan Stanley and subsequent transactions. As a result, “it has been unable to overcome the debt burden placed on it as a result of the aforementioned transactions,” the filing says. It also outlines the grocery industry challenges Tops has faced — coupled with the its 85% unionized workforce. These factors have combined to put pressure on Tops’ profit margin, Buenzow wrote. He also cites an inability to make capital investments because of its debt. The company also has been making payments to a Teamsters pension fund related to its acquisition of Erie Logistics.
In addition to committing to continue paying suppliers and vendors, Tops said it expects to operate as normal as it navigates the restructuring process.
“Tops has gained strong market share and we continue to distinguish ourselves by offering quality products at affordable prices with superior customer service,” Curci said in a letter to suppliers. “We have an outstanding network of stores and a strong operational team to support them. Through this financial restructuring, we intend to substantially reduce our debt and enhance our long-term financial flexibility, allowing us to invest further in our stores, create an even better shopping experience for our customers and compete more effectively in today’s highly competitive and evolving market.”
WBA, Express Scripts enter specialty Rx purchase agreement
Express Scripts and Walgreens Boots Alliance on Tuesday expanded their group purchasing efforts to include the procurement of specialty drugs.
”As prescription drug needs evolve and specialty medications are prescribed more often, we continue to look for new solutions that will help our patients get the medications they need at an affordable price,” Alex Gourlay, co-COO Walgreens Boots Alliance, said. “Working with Express Scripts, we are partnering to deliver even more value to our patients and clients to improve health outcomes.”
Their work will be supported by ValoremRx Specialty Solutions, which will source specialty drugs to simplify the global supply chain and lower costs for patients and clients, including patients using Express Scripts’ specialty pharmacy Accredo and Walgreens specialty pharmacy.
“Specialty medications represent the most costly and complex drugs. By expanding our efforts with Walgreens Boots Alliance, we will improve our supply chain and ultimately make the use of these medicines, including biosimilars, more affordable and accessible for our patients and clients,” Tim Wentworth, Express Scripts president and CEO, said.
Walgreens has been making recent investments into its specialty arm. For example, just last month Walgreens received a U.S. patent for new proprietary technology that facilitates communication with and counseling of patients prescribed oral oncology medicines.
“As more and more cancer patients are self-administering oral oncolytic medications without medical supervision, there is no way for providers to know if the patient is taking the medication as prescribed or what side effects they may be experiencing,” Rick Miller, senior director, specialty clinical services at AllianceRx Walgreens Prime, stated at the time of the announcement. “This is where our interaction guiding system, coupled with pharmacy experts, becomes extremely valuable as it drives communication with our patients and allows our pharmacists to gather important information about their treatment.”
Through Walgreens Connected Care Oncology, an evidence-based, patient-centered process focused on driving medication adherence and improving patient outcomes, this newly patented technology helps guide interactions with patients, helping them stay on their treatment and manage any possible side effects.