Hawaii Cost-U-Less stores change ownership in buyout
The North West Co. Fund has agreed to acquire Cost-U-Less Inc., including its two Hawaii stores on Kauai and the Big Island, for $52.2 million, or $11.75 per share in cash.
The sale is expected to close by the end of November.
Bellevue, Wash.-based Cost-U-Less, which started in 1989 with the opening of its first store in Hawaii, operates mid-size warehouse stores in remote locations with a population of 30,000 or less.
The Canadian buyer will evaluate growth opportunities in Hawaii, the Caribbean and the South Pacific, said Edward Kennedy, North West's president and CEO.
However, Hawaii is a highly competitive market with much more retail activity than American Samoa or Guam, where Cost-U-Less operates three stores, Kennedy said.
"We do better in smaller markets and some parts of Hawaii are already too large," he said, adding that with multiple Costco and Sam's Club stores, it is unlikely Cost-U-Less will expand to Oahu.
"Hawaii is pretty well served today and there may not be as many opportunities as in the South pacific or the Caribbean."
Cost-U-Less operates a 25,000-square-foot store in Kapaa on Kauai and in Hilo on the Big Island.