"Exclusive membership" has never been as common as it is at BJ's Wholesale Club. The firm is the nation's #3 membership warehouse club (far behind leaders Costco and SAM'S CLUB) and #1 in New England, with more than nine million members and 200-plus locations in 15 states, mostly along the Eastern Seaboard. Food, including canned, fresh, and frozen items, accounts for about two-thirds of sales at BJ's. The remainder comes from general merchandise, including apparel, housewares, office equipment, small appliances, and gas. Unlike its major rivals, BJ's targets individual retail customers rather than small businesses. BJ's was taken private by Leonard Green & Partners in 2011.
Change in Company Type
The company was taken private in September 2011 by Leonard Green & Partners and CVC Capital Partners in a deal valued at about $2.8 billion. (The offer represented an approximately 38% premium to the closing price of BJ's shares on June 30, 2011.) The deal came after much takeover speculation, which began swirling around BJ's after the company cut costs and improved efficiency to pretty itself up for sale.
BJ's operates 200-plus stores in 15 states from Maine to Florida. Its largest markets are New York, Florida, and Massachusetts, home to nearly half of its stores.
Beyond its wholesale clubs, BJ's also sells merchandise online at BJs.com. More than 150 of the chain's wholesale outlets contain BJ's Optical departments and about 115 sell gas. The BJ's Services and Travel division offers vacation packages, and hotel and car rental services, as well as health, home and auto insurance, home improvement and installation services, and car buying services.
While the company no longer reports annual sales since going private, Supermarket News estimates BJ's rang up $11.6 billion in fiscal 2013 (ended January), up from $11.3 billion in fiscal 2012.
By going private, regional BJ's Wholesale Club is hoping to gain the financial flexibility to expand beyond the Eastern Seaboard and strengthen its position in food and consumables. BJ's, which counts supermarkets among its main competitors, aims to be customers' first stop for groceries, offering smaller package sizes and lower prices than supermarkets. BJ's is also diversifying its selection with organic produce, fresh and frozen appetizers, desserts, and restaurant-branded items. The company's private equity owners have significant retail holdings, although CVC's are mainly overseas. Leonard Green & Partners counts The Container Store, Jo-Ann Stores and J. Crew Group among its portfolio companies. The firm also has holdings in Whole Foods Market, PETCO, and other retailers. Since it went private, BJ's has added about a dozen locations.
BJ's Wholesale Club is owned by Beacon Holding Inc, an affiliate of Leonard Green & Partners and funds advised by CVC Capital Partners.