SUPERVALU Announces Plans to Exit Farm Fresh Banner
Business Wire 14-Mar-2018 6:29 PM
Company Agrees to Sell 21 Stores and Continues Discussions to Sell Additional Farm Fresh Stores
Demonstrates Further Execution of Wholesale Transformation Strategy
MINNEAPOLIS & VIRGINIA BEACH, Va.--(BUSINESS WIRE)-- SUPERVALU INC. (NYSE: SVU) today announced it has entered into three separate definitive agreements to sell 21 of its 38 Farm Fresh Food & Pharmacy (Farm Fresh) stores for approximately $43 million in cash to three different retailers: Harris Teeter, Kroger Mid-Atlantic Division, and Food Lion. SUPERVALU is also continuing discussions and exploring potential transactions to sell the remaining Farm Fresh stores to current and prospective wholesale customers and certain Farm Fresh employees.
Over the past two years, weve been working diligently and rapidly to transform our business to become the wholesale supplier of choice for grocery retailers across the United States, said Mark Gross, SUPERVALUs President and CEO. 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.
We are thankful for the tremendous service our employees have delivered at Farm Fresh through the years, and are grateful for the opportunities weve 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, 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.
In summary, the agreements provide for:
Ten stores being sold to Harris Teeter, including six in-store pharmacies and three fuel centers
Eight stores being sold to Kroger Mid-Atlantic Division, including eight in-store pharmacies and four fuel centers
Three stores being sold to Food Lion, including three in-store pharmacies
The transactions, which were unanimously approved by SUPERVALUs board of directors, are currently expected to close in May 2018, subject to customary closing conditions. SUPERVALU is also working with a third party to liquidate the inventory at these Farm Fresh stores.
With regards to Farm Fresh pharmacies not included in these three sale transactions, SUPERVALU has entered into agreements to transfer pharmacy prescription files to other pharmacies in the area. Prescription files from ten pharmacies will be transferred to Rite Aid and four to CVS Pharmacy. Customers of these Farm Fresh pharmacies will receive detailed information on the transfer of their pharmacy files by mail within the next seven to ten days, and information will also be available at each pharmacy.
A complete list of stores to be sold under the agreements, along with a list of the impacted pharmacies and correlating pharmacies where prescription files will be transferred, is included in the addendum to this press release.
Founded in 1957, Farm Fresh has served Virginia and North Carolina for 60 years, and today employs approximately 3,300 associates.
The Food Partners, LLC advised SUPERVALU on the transactions, and is advising SUPERVALU on its continued exploration of the sale of additional Farm Fresh stores.
About SUPERVALU INC. (The following information does not include Associated Grocers ofFloridawhich became part ofSUPERVALUonDecember 8, 2017)
SUPERVALU INC.is one of the largest grocery wholesalers and retailers in the U.S. with annual sales of approximately$16 billion.SUPERVALUserves customers acrossthe United Statesthrough a network of 3,324 stores composed of 3,111wholesale primary stores operated by customers serviced by SUPERVALUs food distribution business and 213 traditional retail grocery stores operated under five retail banners in six geographic regions (store counts as of December2, 2017). Headquartered inMinnesota,SUPERVALUhas approximately 31,000 employees. For more information aboutSUPERVALUvisitwww.supervalu.com.
Forward Looking Statements
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
Except for the historical and factual information, the matters set forth in this news release, particularly those pertaining to the expected completion of the sales of Farm Fresh stores (including the timing thereof), the ability to consummate the sales and SUPERVALUs expectations, guidance, or future operating results, and other statements identified by words such as "estimates" "expects," "projects," "plans," "intends," "outlook" and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the ability to satisfy the closing conditions and close the proposed sales on a timely basis or at all, the possibility that modifications to the terms of the transactions may be required, business disruption, ability to effectively retain key employees and ability to effectively manage organization changes during the pendency of or following the transactions, and other risk factors relating to the business or industry as detailed from time to time in SUPERVALU's reports filed with the SEC. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. For more information, see the risk factors described in SUPERVALUS Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC. Unless legally required, SUPERVALU undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
LIST OF FARM FRESH STORES BEING SOLD AS PART OF THIS ANNOUNCEMENT
Farm Fresh Store Location City/State Zip Acquiring Buyer
1615 General Booth Blvd Virginia Beach, VA 23454 Food Lion
683 Hughes Blvd Elizabeth City, NC 27909 Food Lion
608 E Mercury Blvd Hampton, VA 23663 Food Lion
2110 Great Neck Shopping Center Virginia Beach, VA 23454 Harris Teeter
227 Fox Hill Rd, A01 Hampton, VA 23669 Harris Teeter
4511 John Tyler Hwy Williamsburg, VA 23185 Harris Teeter
3675 Bridge Rd Suffolk, VA 23435 Harris Teeter
1400 Kempsville Rd Suite 109 Chesapeake, VA 23320 Harris Teeter
179 W Ocean View Ave Norfolk, VA 23503 Harris Teeter
521 Laskin Rd Virginia Beach, VA 23451 Harris Teeter
1069 Independence Blvd Virginia Beach, VA 23455 Harris Teeter
730 W 21st St Norfolk, VA 23517 Harris Teeter
2129 General Booth Blvd Virginia Beach, VA 23454 Harris Teeter
1401 N Main St Suffolk, VA 23434 Kroger Mid-Atlantic Division
230 E Little Creek Rd Norfolk, VA 23505 Kroger Mid-Atlantic Division
2190 Coliseum Dr Hampton, VA 23666 Kroger Mid-Atlantic Division
309 S Battlefield Blvd Chesapeake, VA 23322 Kroger Mid-Atlantic Division
1282 Smithfield Plaza Smithfield, VA 23430 Kroger Mid-Atlantic Division
6500-c George Washington Memorial Hwy Yorktown, VA 23692 Kroger Mid-Atlantic Division
1464 Mt. Pleasant Rd Chesapeake, VA 23320 Kroger Mid-Atlantic Division
7254 George Washington Memorial Hwy Hayes, VA 23072 Kroger Mid-Atlantic Division
LIST OF REMAINING FARM FRESH PHARMACIES AND WHERE PRESCRIPTION FILES ARE BEING TRANSFERRED
Farm Fresh Pharmacy Location City/State Zip Where Prescription Files are Being Transferred
1620 Cedar Road Chesapeake, VA 23322 Rite Aid: 1415 Cedar Rd., Chesapeake VA 23322
701 A. N. Battlefield Boulevard Chesapeake, VA 23320 Rite Aid: 101 Gainsborough Square, Chesapeake VA 23320
1459 Armory Drive Franklin, VA 23851 Rite Aid: 1031 Armory Drive, Franklin VA 23851
30 Towne Center Way Hampton, VA 23666 Rite Aid: 40 Towne Centre Way, Hampton VA 23666
601 Childrens Lane Norfolk, VA 23507 Rite Aid: 525 West 21st St., Norfolk VA 23517
201 E. Berkley Avenue Norfolk, VA 23523 Rite Aid: 2040 Atlantic Ave., Chesapeake VA 23324
460 Wythe Creek Road Poquoson, VA 23662 Rite Aid: 421 Wythe Creek Rd., Poquoson VA 23662
799 Chimney Hill Shopping Center Virginia Beach, VA 23452 Rite Aid: 1177 S. Rosemont Rd., Virginia Beach VA 23453
4001 Virginia Beach Boulevard Virginia Beach, VA 23452 Rite Aid: 3653 Virginia Beach Blvd., Virginia Beach VA 23452
2058 S. Independence Boulevard Virginia Beach, VA 23453 Rite Aid: 1808 Salem Road, Virginia Beach VA 23456
353 Chatham Drive Newport News, VA 23602 CVS Pharmacy: 12755 Jefferson Avenue
4000 Victory Boulevard Portsmouth, VA 23701 CVS Pharmacy: 1800 Frederick Boulevard, Portsmouth, VA 23707
4876 Princess Anne Road Virginia Beach, VA 23462 CVS Pharmacy: 4500 Princess Anne Road, Virginia Beach, VA 23462
115 Norge Lane Williamsburg, VA 23188 CVS Pharmacy: 7529 Richmond Road, Williamsburg, VA 23188
1200 North Military Highway Norfolk, VA 23502 Customers to be notified within the next seven to ten days
928 Diamond Spring Road Virginia Beach, VA 23455 Customers to be notified within the next seven to ten days
NOTE: Customers of these Farm Fresh pharmacies will receive detailed information on the transfer of their pharmacy files by mail within the next several days, and information will also be available at each Farm Fresh pharmacy.
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Source: SUPERVALU INC.