Closures expected to generate $35 million in cash within 12 months;
$80-$90 million expected over next 3 years
Company anticipates closures to result in non-cash charges of $80-$90
million (pre-tax) and gains on sale of departmental assets of
approximately $10 million in fiscal 2013
MINNEAPOLIS--(BUSINESS WIRE)--Sep. 5, 2012--
SUPERVALU INC. (NYSE: SVU) today announced it will close approximately
60 underperforming or non-strategic stores this fiscal year including 38
in its retail food reporting segment and 22 Save-A-Lot locations. The
majority of the stores are expected to close before December 1, 2012,
the end of the Company’s fiscal 2013 third quarter.
“These decisions are never easy because of the impact a store closure
has on our team members, our customers, and our communities,” said Wayne
Sales, SUPERVALU’s president, chief executive officer, and chairman.
“Today’s announcement reflects our commitment to move with a greater
sense of urgency to reduce costs and improve shareholder value.”
As a result of the closures, SUPERVALU expects to record a pre-tax
charge of $80-$90 million in fiscal 2013, with all but $3 million in
estimated severance costs being non-cash. Of these amounts, $50-$55
million is expected in the Company’s fiscal 2013 second quarter (ending
September 8, 2012) with the majority of the remainder anticipated to be
recorded in its fiscal 2013 third quarter. In addition, a pre-tax gain
of approximately $10 million from the sale of departmental assets is
expected in fiscal 2013 second quarter.
Over the next three years, the Company estimates that closing these
locations will generate between $80- $90 million in cash from monetizing
owned real estate, eliminating cash operating losses, and selling
departmental assets. The Company owns the real estate for approximately
one-third of the retail food stores being closed. Cash generated from
these actions will be used to reduce outstanding debt and for other
general corporate purposes. These closures will also be accretive to net
The closures in the retail food segment include 27 Albertsons stores (19
in Southern California, including one previously announced location, and
eight in the Intermountain West region), four ACME stores, and one
previously announced Jewel-Osco location.
Eight additional stores are included in this announcement but due to
ongoing contractual discussions the specific details of each store are
not being disclosed at this time. All eight are expected to close by the
end of SUPERVALU’s fiscal year which is February 23, 2013.
About SUPERVALU INC.
SUPERVALU INC. is one of the largest companies in the U.S. grocery
channel with annual sales of approximately $35 billion. SUPERVALU serves
customers across the United States through a network of approximately
4,400 stores composed of 1,101 traditional retail stores, including 798
in-store pharmacies; 1,336 hard discount stores, of which 939 are
operated by licensee owners; and 1,950 independent stores serviced
primarily by the Company's food distribution business. SUPERVALU has
approximately 130,000 employees. For more information about SUPERVALU
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 contained herein,
the matters set forth in this news release, particularly those
pertaining to SUPERVALU’s expectations, guidance, or future operating
results, and other statements identified by words such as "estimates,"
"expects," "projects," "plans," 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
competition, ability to execute initiatives, substantial indebtedness,
impact of economic conditions, labor relations issues, escalating costs
of providing employee benefits, regulatory matters, food and drug safety
issues, self-insurance, legal and administrative proceedings,
information technology, severe weather, natural disasters and adverse
climate changes, the continuing review of goodwill and other intangible
assets, accounting matters and other risk factors relating to our
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. 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
Source: SUPERVALU INC.
Mike Siemienas, 952-828-4245