An investor group that bought more than 600 troubled Albertsons stores outside of Idaho in 2006 has cut a deal to buy the rest of the Albertsons stores from Supervalu Inc.
We see great potential to improve operations, drive new energy and create a winning attitude with our store-level associates, and earn back our customers trust and business, said Bob Miller, CEO of Albertsons LLC, the Boise company created to run or sell off the 655 stores on the investors behalf. The investor group plans to take over the Supervalu-owned stores in mid-March.
Supervalu, based in a Minneapolis suburb, said Thursday that it reached a deal to sell four grocery chains Albertsons, Acme, Jewel-Osco, and Shaws and Star Market, a single chain with two banners for $100 million in cash and more than $3 billion in debt. The sale includes 877 stores.
The investor group buying them is led by a New York private-equity firm, Cerberus Capital Management LP, owner of Albertsons LLC.
Whats to come of local Albertsons stores?
A spokeswoman for Albertsons LLC said the company is excited about the opportunity to drive growth and has no immediate or specific plans to close, sell or change any of the Supervalu Albertsons stores. Miller said he believes the flagging chain can be revived.
However, there is speculation that the new owners could shutter local stores. Thats partly because of the groups history: Cerberus closed about two-thirds of the stores it bought in 2006. Cerberus is not really a grocery operator, said David J. Livingston, a Wisconsin-based supermarket analyst. I hope nobodys getting their expectations too high in terms of employment or an improved shopping experience.
Dont expect all the stores to close, though, he said: Some can
be kept alive with major cost-cutting.
What does this mean for local workers?
Since the deal isnt final, nobody is saying whether employees at local stores or at Supervalus Boise headquarters will keep their jobs. Those details will take several months to iron out, a Supervalu spokesman said.
Supervalu employs an estimated 3,300 employees in Idaho, including about 1,000 in Boise. It has 33 Albertsons stores in the state.
Albertsons LLC said in a news release that the combined company, including the reunited Albertsons chains and the three other chains, will employ about 110,000 people. Albertsons LLC employs 20,000 people today.
The new company would own 1,069 stores and 12 distribution centers after the buyout is complete. That compares with 190 Albertsons LLC stores now.
Why did Supervalu sell?
Supervalu, a public company, has struggled for years to turn around its grocery-store business, and the debt it took on during the 2006 acquisition didnt help. The broader supermarket industry has been facing growing competition from big-box stores such as Walmart and Boises WinCo Foods.
While chains such as Kroger Co., which owns Fred Meyer stores, have adapted by tweaking store formats and building customer loyalty through discount programs and improved offerings, Supervalu has scrambled to keep pace.
Like Cerberus, Supervalu closed some Albertsons stores. It also cut administrative jobs in Albertsons Inc.s old offices in Boise. Supervalus employment in Idaho shrank about 40 percent from its 2007 level of 5,600.
This summer, Supervalu fired its CEO and put itself up for sale. The surviving parts of Supervalu will include food wholesaler Save-A-Lot, and regional chains Cub, Farm Fresh, Shoppers, Shop n Save and Hornbachers. Their revenue will be about half of Supervalus revenue today. Miller will become Supervalus chairman under a part of the deal that gives the Cerberus consortium a share of Supervalus ownership and a role on its board.
How does this affect the Stinker stores at Albertsons locations?
Stinker bought 14 fuel locations a dozen with convenience stores at Southern Idaho Albertsons stores in October 2011 from Supervalu.
A successful Albertsons is very much in my interest, said Charley Jones, Stinker owner.
But if any Albertsons store is shuttered, it doesnt mean death to (our) store, he said. I dont see any of our stores going from profitable to unprofitable.
Twitter: @IDS_Audrey. Statesman wire services contributed.