SuperValu has entered into three separate definitive agreements to sell 21 of its 38 Farm Fresh Food & Pharmacy ("Farm Fresh") stores for approximately $43 million cash; with some stores being sold to Harris Teeter (a branch of Kroger), Kroger Mid-Atlantic Division, and Food Lion (a branch of Ahold Delhaize). SuperValu will continue discussions concerning the sale of the remaining 17 Farm Fresh stores.
"Over the past two years, we’ve been working diligently and rapidly to transform our business to become the wholesale supplier of choice for grocery retailers across the United States," said SuperValu’s President and CEO Mark Gross in a recent press release. "In 2016, we sold Save-A-Lot and its network of approximately 1,350 retail locations. Last year, we acquired Unified Grocers and Associated Grocers of Florida, which when combined with substantial organic growth, added more than $5 billion in run rate sales to bring our core wholesale business to nearly $13 billion. Exiting the Farm Fresh banner will enable us to allocate greater resources and energy toward the strategic growth of our wholesale business. We also continue to aggressively pursue other important initiatives, including the monetization of real estate through sale leaseback transactions and cost reduction across the company. We are confident our efforts are driving growth and enhancing our competitive position."
Gross continued, "This decision was not taken lightly given the impact on our employees and the communities we serve, but we strongly believe this decision is in the best long-term financial and strategic interest of our business. Our leadership team and board of directors remain committed to taking proactive steps to transform our business and drive stockholder value.”
All in all, the purchases are as follows:
“We are thankful for the tremendous service our employees have delivered at Farm Fresh through the years and are grateful for the opportunities we’ve had to share in the lives and special events of our customers and employees across the Hampton Roads, Richmond, Williamsburg, and Elizabeth City communities,” said Anne Dament, SuperValu's Executive Vice President, Retail, Marketing, and Private Brands. “We are working with the buyers to ensure a smooth transition, and we expect them to offer positions to many Farm Fresh employees. In addition, we plan to offer eligible employees severance and other job transition support.”
The transactions are expected to close in May 2018, subject to customary closing conditions, and were unanimously approved by SuperValu’s Board of Directors. SuperValu pharmacies that were not included in the agreement will have their prescription and pharmacy files transferred to Rite Aids and CVS Pharmacies in the region.
Kroger plans to invest $30 million in renovations, according to Daily Press, to update the newly-acquired locations with fuel centers and pharmacies.
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