BJ’s Wholesale Club Inc. (BJ), in an attempt to expand its operational roots, is all set to serve the residents of Northborough, Massachusetts by opening a new store and providing them an avenue to generate savings on groceries and general merchandise.
The new 120,000-square-foot club in Northborough replaces the BJ's 23-year-old wholesale club in Westborough, Massachusetts. Apart from selling home-grown produce, the company will offer premium products along with widely accepted national brands of every kind.
Moreover, the residents of Northborough will get the benefit of acquiring goods at prices lower than traditional wholesalers, discount retailers, supermarkets, and specialty retailers.
Earlier, BJ’s announced that majority of its shareholders approved the $2.8 billion offer of Leonard Green & Partners and CVC Capital Partners for making the company private. Further, the company stated that approximately 72% of its shareholders approved the deal, while a meager 0.4% voted against it.
Going further, BJ’s anticipates the deal to be completed on or about September 30, 2011. Moreover, the shares of the company will be delisted from the New York Stock Exchange on completion of the deal.
BJ’s, which faces intense competition from Costco Wholesale Corporation (COST), offers a striking prospect for investment as it has a healthy balance sheet with modest debt along with a business opportunity in a sturdy food and grocery market that is gaining ground.
Moreover, BJ’s continued investments in Club payroll and Club remodels facilitate the company to augment the sales of perishable items, which have been the driving factor, and have helped in increasing sales, improving traffic counts and gaining market share.
Further, as a warehouse club, BJ’s is uniquely positioned to drive traffic as it provides wider assortments of brands at compelling prices and offers its customers the choice of bulk or consumer-friendly package sizes.
Currently, we prefer to maintain a long-term ‘Neutral’ recommendation on the stock. Moreover, BJ’s holds a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating.
BJ’S WHOLESALE (BJ): Free Stock Analysis Report
COSTCO WHOLE CP (COST): Free Stock Analysis Report
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