Ollie’s Bargain Outlet, a discount retailer with 340 locations nationwide, has signed a lease on the former Toys R Us building on West Waco Drive, an Ollie’s official said Wednesday.
“Our specialty is name-brand products at cheap prices,” vice president of real estate Jerry Altland said Wednesday.
Ollie’s is opening 40 to 50 stores annually, and is continuing a push into Texas, Altland said.
The store’s website shows grand openings planned in early October in Worcester, Massachusetts; Palm Beach, Florida; and Wooster, Ohio, and recent openings in 23 other cities, including the Fort Worth suburb of Benbrook. Ollie’s Bargain Outlet also operates stores in the Texas communities of Mesquite, Lewisville, Nacogdoches and Marshall.
Altland said the company, which started as a single location in Mechanicsburg, Pennsylvania, has signed leases on other vacant former Toys R Us locations that the iconic chain departed after its Chapter 11 bankruptcy filing. At close to 45,000 square feet, the former Toys R Us space in Waco’s Centerpoint shopping center is larger than most buildings Ollie’s occupies, Altland said. The typical Ollie’s occupies 32,000 to 35,000 square feet, he said.
“That just means we’ll have more space to sell name-brand merchandise cheap,” Altland said.
The Waco store likely will open in spring 2020, after crews clean and remodel the existing space and stock the shelves, he said.
Ollie’s opened 29 new stores during the first half of the current fiscal year, including 13 in former Toys R Us locations, according to its second quarter financial report. The company reported revenue of $339 million during the second quarter and projected sales of $1.4 billion for the year.
Still, the second quarter was challenging in some respects, including a 1.7% drop in comparable store sales and a 15.7% decline in net income, CEO Mark Butler wrote in the report. He believes the declines are short-term and due, in part, to the company’s rapid expansion, Butler wrote.
Altland, meanwhile, declined to discuss specifics of the Waco lease.
“We’re a publicly traded company, so I’d rather not get into specifics,” he said. “I can say we will be there a long time, if options are included.”
The chain will open a warehouse in the Dallas suburb of Lancaster as it opens more stores in Texas, Altland said.
The chain carries merchandise in more than 20 categories, including books, furniture, toys, non-perishable food products, floor coverings and housewares, he said. An advertising flyer the chain circulated for its grand opening in Benbrook included a Poulan 16-inch chainsaw for $99.99, Dr. Scholl’s compression socks for $2.99 a pair, a Lane jumbo recliner for $229.99, a Disney Pixar Art Studio game for $4.99 and a 19-ounce Yankee Candle for $7.99. It also announced the chain had secured toy inventory, “a total of 5,000 truckloads,” that would have a retail value of $233 million.
Asked if Ollie’s is comparable to Big Lots, which operates locally at 4905 West Waco Drive, Altland said, “There is some similarity, but I think we have more closeout sales than they do.”
Officials at the local Big Lots referred comment to corporate headquarters.
Waco commercial real estate agent Pat Farrar, who markets Centerpoint shopping center, said he welcomes the arrival of Ollie’s Bargain Outlet and the impact such a formidable retailer could have on his pursuit of other tenants.
“I would expect them to do well,,” Farrar said. “I know Big Lots does.”
The Waco Toys R Us, which opened in 1986 and closed in summer 2018, was among the better performing locations in the Toys R Us system, Farrar said last year, citing financial information he researched for a California-based client once interested in buying Centerpoint shopping center.