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Supervalu may be sold: Reuters
Posted on Thursday, 12 July 2012 12:08
US supermarket chain Supervalu is considering strategic options including a sale, according to Reuters, citing chief executive Craig Herkert.
Herkert said that bankruptcy is not being considered by the Minnesota-based business, which Reuters said has suspended its dividend to finance price cuts with a view to increasing its customer base.
The news provider noted that in recent years Supervalu has been losing out to cheaper rivals Wal-Mart and Kroger, prompting plans to reduce its prices.
It added that the company has hired Goldman Sachs and Greenhill & Co to advise on the strategic review, and also said that debts accrued following the company’s USD 12.40 billion acquisition of more than 1,100 Albertsons stores in 2006 have been preventing cuts up until now.
Supervalu is headquartered in Eden Prairie and is a leader in the grocery retail sector, according to its website.
Founded in 1926 as the Winston and Newell Company, it became known as Super Valu in 1954, and has been operating under its current name since 1992.
The company’s retail network comprises over 2,400 stores, and it also offers supply chain and support services to 4,300 retail end points.
With more than 135,000 employees, Supervalu is a Fortune 100 company.
The firm recorded net sales of USD 36.10 billion in fiscal 2012, down 3.7 per cent on the USD 37.50 billion generated in 2011.
Yesterday, it announced disappointing results for the quarter ending June 16th, reporting sales of USD 10.60 billion for the period, a 4.5 per cent decline on the corresponding quarter last year.
Supervalu has been listed on the New York Stock Exchange since 1967, where its shares closed up 2.7 per cent at USD 5.29 on 11th July.
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