Albertsons stores being sold

2013-01-10T10:02:00Z 2014-08-25T16:13:08Z Albertsons stores being soldBy JAN FALSTAD The Billings Gazette

Employees at about 30 Albertsons stores in Montana and 10 in Wyoming will have to wait to hear if their jobs and benefits will remain the same after the announced sale of the grocery chain.

After three years of declining sales, Supervalu Inc., based in Eden Prairie, Minn., said Thursday that it had reached an agreement to sell 877 grocery stores, including all of its Albertsons stores, and other national chains under the names Acme, Jewel-Osco, Shaw’s/Star Markets. The sale also includes the in-store pharmacies Osco and Sav-on.

When asked if employee pay or benefits would be affected, Supervalu spokesman Mike Siemienas said that will be decided later.

“The management teams for both organizations will determine staffing needs and roles and responsibilities for their respective companies,” he said. “This process may take several months.”

Loretta Ramus, who lives two blocks from the Albertsons on Main Street, said she has been shopping there since it was a Buttrey Food grocery. She doesn’t plan to change her habits.

“We buy meat and whatever I can find here that I can’t find shopping somewhere else,” she said.

Another Heights resident, Bill Bradshaw, also shopped at the store under the Buttrey label.

“It’s close and handy,” he said. “If it was a Safeway, I’d still shop here. There’s no brand loyalty.”

Supervalu would not immediately disclose how many employees it has in Montana and Wyoming or allow interviews with local managers or photos in its stores.

The sale that will be completed by the end of March will not immediately affect how the Albertsons stores are operated or continued customer service, Siemienas said.

Supervalu sold to investor-owned AB Acquisition LLC, which is affiliated with Cerberus Capital Management of New York City. AB Acquisition will pay Supervalu $100 million in cash and assume $3 billion in debt for the stores.

Cerberus, formed a decade ago, bills itself as the world’s leading private equity company. In 2006, when Supervalu bought most of the Albertsons chain, another Cerberus affiliate purchased Albertsons stores in the South and Southwest.

"We are reuniting the Albertsons stores under one company," said spokeswoman Christine Wilcox in Fort Worth, Texas.

Albertsons operates six stores in Billings. Two are new stores, and the other four have been recently remodeled. In 2011, in an attempt to improve its financial performance, Supervalu sold most of its fuel centers, including five in Montana. Billings used to have other grocery brands like Smith’s and County Market that were closed or merged.

Last July, Supervalu put itself up for sale. Negotiations with Cerberus have been going on for about six months, Siemienas said, and Supervalu’s board decided the sale is in the best interests of its investors.

Supervalu produces about $35 billion in revenue per year. The company expects to have revenue of $17 billion after this sale, but stronger cash flow and better growth prospects, Siemienas said.

Supervalu is keeping its wholesale grocery business that serves 1,950 independent stores and more than 1,300 Save-a-Lot stores. Supervalu will continue to operate 191 regional groceries under the names Cub, Farm Fresh, Shoppers, Shop ’n Save and Hornbacher’s.

After announcing the sale, Supervalu, which will remain publicly traded, saw its shares rise 14 percent Thursday to $3.47.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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