Supervalu Could Spin Off Save-A-Lot
MINNEAPOLIS — Supervalu Inc. has announced that it is exploring a separation of its Save-A-Lot smaller-format, limited-assortment grocery business, and that as part of that process it has begun preparations to allow for a possible spinoff of Save-A-Lot into a standalone, publicly traded company.
“Save-A-Lot is a leading national hard discount retailer with over 1,300 total stores, comprised of approximately 430 corporate stores and approximately 900 stores operated by licensee owners, and we believe Save-A-Lot has significant growth potential. Over the last two and a half years, Save-A-Lot has repositioned its brand, refocused its efforts on fresh produce and meat, and remerchandised its stores and product offerings to better appeal to a broader group of customers,” said president and CEO Sam Duncan.
“We believe a separation of our Save-A-Lot business could allow Save-A-Lot, our independent business and our retail food banners to better focus on their respective operations, and pursue strategies specific to their business characteristics and growth potentials, for the benefit of our shareholders, customers, licensees and employees,” he said.
The company has not set a specific timetable for a separation, if any.
Supervalu has engaged Barclays and Greenhill to serve as financial advisors, and Wachtell, Lipton, Rosen and Katz as legal advisor, in connection with this possible separation.
The stores, which average 15,000 square feet and allow for a quick and easy shopping experience, offer a reduced SKU assortment–approximately 2,500 items–the cover more than 90% of everyday shopper needs.
Eden Prairie, Minn.-based Supervalu is one of the largest grocery wholesalers and retailers in the United States with annual sales of approximately $18 billion. It has a network of approximately 3,600 stores composed of about 1,850 stores serviced by the company’s food distribution business; about 1,335 Save-A-Lot stores, of which more than 900 are operated by licensee owners; and nearly 200 traditional retail grocery stores. Save-a-Lot is based in Earth City, Mo.
