Natalie MacLennan’s Post

AutoZone is often considered one the companies with the best ratio of stock return to business quality. The stock is up ~500x since its IPO. What is the story behind AutoZone? What has enabled a ~mediocre~ business to create so much value for its shareholders? Today we are exploring the story of an amazing American success 1) Its Founding AutoZone’s story starts in Forrest City, Arkansas in 1979. Entrepreneur J.R. “Pitt” Hyde III noticed there was a gap in the automotive parts industry. There weren’t any stores particularly focused on the do-it-yourself market. His vision was a one-stop shop allowing customers to find, purchase, and install auto parts themselves. AutoZone originally started as a division of Malone & Hyde, a wholesale grocer, and was just one of the many divisions operating under the Malone & Hyde brand.  2) KKR Enters the Scene A majority of AutoZone's parent company, Malone & Hyde, was sold to KKR in 1984 for $500mm, which also marked KKR’s first purchase of a public company. This came to be a pivotal move in the history of AutoZone as it provided access to capital and superior management for rapid expansion. By 1987, AutoZone had become so profitable that Hyde and KKR, in order to focus on growing AutoZone, sold off the other divisions of Malone & Hyde to Fleming companies for $600mm. 3) A Defining Moment and Going Public One of the defining moments in AutoZone’s history came with the creation of the Duralast brand in 1988. Duralast, which started as a line of starters and alternators, is AutoZone’s brand of auto parts offered at an affordable price. This proved to be a massive success for AutoZone, with $500mm in sales by the end of 1989. In April of 1991, AutoZone was listed publicly on the New York Stock Exchange as AZO, trading at an opening price of $27.50 per share. KKR held on to 68% of shares. The stock is up 500x since its IPO. 4) Magical Capital Allocation The most unique aspect of AutoZone’s financial performance, and another driver of its impressive stock performance, is its share buyback program. Since 1998, AutoZone has purchased 154.7mm shares of its own common stock, reducing the number available today to only 17.1mm and dropping its total share count 89% since IPO.  Throughout the lifetime of the company, AutoZone has purchased nearly $40bn worth of its own stock, which has been a major factor in continued EPS growth and impressive stock performance. Bonus: Complete Article I have just included some of the sections of the 3,800-word article that was just published in the Pari Passu Newsletter, if you want me to send you the entire article for free, comment "Interested" and like this post! Pari Passu is an advanced investing newsletter and articles go behind paywall after being published.  Make sure to subscribe now to get all future articles for free! 

When I think about brands, I find it truly inspiring to reflect on the journey and enduring nature of legacy brands. 🌟 True Value Company is a prime example of a brand that has navigated decades of change—witnessing shifts in the world, the retail landscape and even within its own leadership, yet its emblem remains a symbol of reliability and trust. From its humble beginnings in 1948 when John Cotter founded Cotter & Co., our brand started as a wholesale supplier for 25 cooperative hardware retailers across Illinois and the Midwest. Those days of catalog sales might seem like a bygone era, but they laid the groundwork for what True Value has become today. True Value's journey from catalog sales to a modern hardware fixture is a testament to the power of vision and resilience. It's not just about hardware; it's about a commitment to service and community that has stood the test of time. As we continue to evolve, we'll carry forward the spirit of innovation and community that John Cotter championed. With our recent brand refresh, we circle back to why we're here today and why we're dedicated to being here for you tomorrow. It’s about preserving this legacy and living up to the high standards set decades ago. #TrueValue #HereForYou #BrandStorytelling #BrandRevival

***Empowering Excellence Through Values*** At Chapel Hill Tire, our foundation is built on clear values that guide every decision, every interaction, and every step we take—both with our team and our customers. In this insightful article from Modern Tire Dealer, president, Marc Pons shares how our values empower our managers with the autonomy to lead their stores like entrepreneurs, fostering ownership, accountability, and collaboration. Striving for excellence doesn’t mean perfection—it means creating an environment where challenges are tackled together and growth is a team effort. Check out the full article to learn more about how our core values drive success at Chapel Hill Tire.

IN RETAIL NEWS... 💫 Big Lots is set to be acquired by Nexus Capital Management for $765 million after filing for Chapter 11 bankruptcy in September. This sale, recently approved by Delaware Bankruptcy Court, transfers all assets and business operations of the Ohio-based retailer to Nexus, a firm known for its investments in consumer brands like Dollar Shave Club, TOMS, and Natural Balance Pet Foods, Inc.. The sale is expected to be finalized in early December, marking a significant step toward financial stabilization for Big Lots, according to CEO Bruce Thorn. The bankruptcy proceedings involve a restructuring strategy that includes the closure of over 550 stores and the shutdown of a distribution center in Columbus, Ohio, which displaced nearly 400 workers. Despite these closures, Big Lots sought to boost sales by offering deep discounts on Halloween products, purchasing overstock valued at $11 million from a major party supply retailer. Meanwhile, Ollie's Bargain Outlet, Inc. has expanded its presence by acquiring leases for 15 former Big Lots locations through bankruptcy auctions. This addition aligns with Ollie’s ongoing expansion plan, which includes opening 50 stores in 2024. Ollie’s President, Eric van der Valk, noted the acquired Big Lots stores’ compatibility with Ollie’s business model and customer demographics, especially within their existing trade areas. With these transitions, Big Lots aims for a stable future under Nexus, while Ollie’s takes advantage of vacated locations to reinforce its own growth strategy. 🛍️ *** #BigLots #Nexus #Ollies #Retail #Stores #Chapter11 #Acquisition #News

Georgia-Pacific is investing $90 million at its Crossett, Arkansas, mill to continue growing its retail consumer tissue business. The investment at the Crossett mill will add 50 new jobs and will increase converting capacity for high quality bath tissue, including Georgia-Pacific's valued Angel Soft brand. Initial production from this investment is expected in 2026. By the end of this project, Georgia-Pacific will have invested more than $250 million at Crossett since 2019. Georgia-Pacific is investing $90 million at its Crossett, Arkansas, mill to continue growing its retail consumer tissue business. The Crossett mill makes bath tissue for the consumer market, and currently employs more than 400 team members.

Card Factory has entered the US market with the acquisition of Minnesota-based Garven Holdings in a £20m deal. CEO Darcy Willson-Rymer: "Garven represents an exciting opportunity for cardfactory to build scale in the world’s biggest celebration occasions market.” #retailnews https://lnkd.in/eYw68DTg

Circle K will have three distribution centers located in Otsego, Minn.; Lockbourne, Ohio; and Hazelwood, Mo. The three distribution centers average approximately 266,000 square feet.

“Wonder is the beginning of wisdom.” – Socrates Leading with curiosity allows us to connect more authentically with clients and others by seeking to understand their unique challenges and experiences. By being truly curious and empathetic, we not only help them navigate their issues but also build stronger, more meaningful relationships. Great insight from Chris Blaylock and Wipfli on the power of curiosity in business!

Exciting news from Teso Life! The Japanese department store, with its U.S. headquarters in New York, is expanding to the West Coast in 2025. One of its new locations will be in Federal Way, Washington, showcasing a trend where companies repurpose spaces left vacant by struggling big box retailers. Situated in Federal Way's Celebration Center retail hub, Teso has secured a lease for 19,726 square feet at 32015-32079 Pacific Highway S. The lease agreement, spanning 10 years according to CoStar, marks a significant move as the property was previously occupied by the pharmacy chain Rite Aid. Teso Life is targeting the second quarter of 2025 for the store's grand opening, with a potential slight delay to the third quarter.

UTZ Brands Inc. announced the opening of a 650,000 square foot Distribution Center in York County/Hanover. It will serve as the primary logistics hub for inventory for all their facilities across the country. The Crnter has 73 dock doors & 375 trailer parking spots. The Co. stated that the facility is large enough to house 11 football 🏈 fields, 9 Boeing 747’s, and 46.8 million Utz cheese ball barrels.