Supervalu to Shutter 60 Stores, Stays Mum on Affected Jobs
Eden Prairie-based Supervalu, Inc., said Wednesday that it will shutter about 60 “underperforming or non-strategic” stores—the latest in a series of moves aimed at helping the struggling retailer turn itself around.
The majority of the affected stores will close by December 1, the end of Supervalu’s third quarter. The remainder are expected to close by February 23, the end of the company’s fiscal year.
Supervalu’s Cub Foods brand will not be affected by this round of closures, according to spokesman Mike Siemienas. There are 66 Cub Foods locations in Minnesota.
The closures include 27 of the company’s 444 Albertson stores in California, Nevada, and several northwestern states, as well as 22 of Supervalu’s 1,336 discount Save-A-Lot stores nationwide. Supervalu will also close four of its 117 Acme stores.
Supervalu did not disclose the locations or brands of the remaining eight stores that will be shuttered, but none are in Minnesota, according to Siemienas.
The company did not say how many jobs will be affected by the store closures, and Siemienas declined to disclose the average number of workers employed by Supervalu’s stores.
“Because of collective bargaining agreements and other factors, we’re not announcing any numbers regarding those affected by this announcement,” Siemienas said.
According to a recent report by the Star Tribune, Supervalu has 80,000-plus union workers. Many labor contracts at Supervalu are currently up for renegotiation, and the possibility that the company may be sold, either in its entirety or in parts, could complicate the negotiating process, according to the Minneapolis newspaper.
The store closures are the latest of several cost-cutting initiatives, many of which have resulted in job cuts. In February, Supervalu announced plans to cut about 800 positions from its corporate and regional offices, including roughly 200 jobs in Minnesota. Then in June, the company announced plans to cut between 2,200 and 2,500 jobs at its Albertsons supermarkets in California and Nevada. The following month, the company eliminated 39 marketing positions.
In mid-July, in conjunction with the release of dismal first-quarter financial results, Supervalu announced that it is seeking a buyer.
And late last month, the company announced several changes to its leadership team. President, CEO, and Chairman Wayne Sales—who replaced ousted CEO Craig Herkert in July—said at the time that the company is “moving quickly to reinvigorate Supervalu, and that starts with leadership.”
As a result of the store closures announced Wednesday, Supervalu said it will record a pre-tax charge of between $80 million and $90 million during its current fiscal year. But during the next three years, Supervalu expects the closures to generate between $80 and $90 million in cash, in part through the sale of real estate and store-related assets.
“These decisions are never easy because of the impact a store closure has on our team members, our customers, and our communities,” Sales said in a statement. “Today’s announcement reflects our commitment to move with a greater sense of urgency to reduce costs and improve shareholder value.”
Scott Mushkin, an analyst at New York-based Jefferies & Company, told Bloomberg that the store closures are “accretive and that’s good, but it does seem like if they were selling assets they wouldn’t be doing this.”
The closures “hint at the idea that an imminent sale is not at hand,” Mushkin told the news outlet.
When asked whether Supervalu is planning additional closures that have not been publicly announced, Siemienas said that the company is “continually reviewing our operations to ensure we’re running as efficiently as possible.”
Supervalu is among Minnesota’s five largest public companies based on revenue, which totaled $36.1 billion in its most recently completed fiscal year. The company has about 130,000 employees nationwide.