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|SUPERVALU Highlights Substantial Transformation Underway|
Company Outlines Significant Wholesale Growth and Steps to Drive Value Creation
The Company issued the following statement:
The SUPERVALU Board and management team are confident that their ongoing efforts to transform the Company are driving growth and enhancing SUPERVALU’s unique competitive position. The Board and management team are committed to delivering value for all stockholders, have been and continue to proactively develop and pursue all opportunities to create stockholder value, and remain open-minded and receptive to ideas that enhance stockholder value.
To that end, over the past few months, members of SUPERVALU’s Board and management team have had several discussions and meetings with representatives of Blackwells. Discussions encompassed a variety of topics pertaining to the business and the Company’s ongoing initiatives as well as our Board refreshment efforts – initiatives that have been underway substantially since before Blackwells became a stockholder. Despite our efforts to reach a constructive path forward and to discuss overlapping objectives, Blackwells has decided to threaten an unnecessary and counterproductive proxy contest.
Rapid Transformation Underway
Executing on a Wholesale Strategy That is Showing Results
Management has implemented an effective three prong wholesale strategy
that is producing strong results: 1) Retain existing customers; 2) Do
more business with existing customers; and 3) Gain new customers.
Execution of detailed action plans underlying each prong and our
unrelenting focus on customer service has driven customer retention to
historical highs and created significant organic growth. In addition,
our integration of Unified Grocers and Associated Grocers of
Taking Action on Retail
We continue to invest in well positioned retail assets, which remain important customers of our growing wholesale business. Retail assets that are not well positioned for long-term success are being operated to maximize cash flow, including limited capital investment. Capital invested into our retail stores will continue to be targeted, prudent, and focused in areas designed to generate incremental sales. We continue to pursue store sales and closures for underperforming locations while exploring options for specific banners.
Wind Down and Conclusion of TSA
The Company’s agreed upon wind down of its contractual relationships
with Albertson’s is expected to largely conclude later this year as has
been previously disclosed. This wind down includes the end of the
significant revenue from the transition services agreements (TSA) as
well as the need for us to relocate from the automated
Marketing Real Estate Underway
The Board and management team continuously and carefully evaluate the
Company’s capital allocation and assets. The Company owns over 18
million square feet of real estate that currently provides operational
and financial flexibility. The Company has publicly stated it is
exploring a sale-leaseback for a portion of this real estate with an
emphasis on its distribution center properties. Any such transaction
must allow for the continued operational and financial flexibility of
the Company’s logistics network.
Board Composed of Proven Leaders with Diverse Experience
The Company notes that its Board is composed of nine highly qualified directors, eight of whom are independent, and all of whom are active, engaged and have the expertise needed to support the Company’s operational and strategic plans. SUPERVALU’s directors are proven leaders with diverse experience including in the wholesale, retail, finance, accounting and food industries. All SUPERVALU Board members are annually elected. Moreover, Board refreshment has been, and continues to be, a top governance priority for the Company, with two of the nine directors having joined the Board in the past two years, and six of the nine directors having served on the Board for less than five years.
In keeping with its standard practice, the SUPERVALU Board’s Corporate
Governance and Nominating Committee will evaluate Blackwells’ nominees,
if and when submitted, in due course. The Board will present its formal
recommendation regarding director nominations in its definitive proxy
materials, which will be filed with the
(The following information does not include Associated Grocers of
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 SUPERVALU’s
efforts and initiatives to transform its business and assets and
SUPERVALU’s expectations regarding the potential impact of those efforts
and initiatives on its 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 execute on the
initiatives on a timely basis or at all, the ability to recognize the
expected benefits of the initiatives, the potential for disruption to
the business during the process, the ability to effectively manage
organization changes during the pendency of or following any
transaction, and other risk factors relating to the business or industry
as detailed from time to time in