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MINNEAPOLIS — Supervalu Inc. has installed Sam Duncan as president and chief executive officer, moving up the date for the former OfficeMax CEO to begin running the reorganized food and drug retailer.
Plans originally called for Duncan to take over as Supervalu’s chief executive after the company closed its deal to sell five of its supermarket chains to Albertson’s LLC and up to 30% of Supervalu’s outstanding common stock to an investor consortium. But Supervalu said Monday that its board wanted Duncan to get to work on strategic plans for the new, smaller company.
The 61-year-old Duncan succeeds Wayne Sales, who has served as Supervalu’s president and CEO since July. Sales is slated to remain executive chairman until the closing of the pending transaction. When the deal is completed, Albertsons LLC president and CEO Robert Miller will become nonexecutive chairman of Supervalu.
"The board decided to install Sam as president and chief executive officer before the completion of our previously announced transaction so he can start refining and, where appropriate, implement plans for the business," Sales said in a statement. "I fully support this decision and look forward to working with Sam to ensure a smooth transition."
Supervalu said Monday that it expects the store sale and stock tender offer transactions to close the week of March 18.
"Following January’s announcement, I have visited stores, spoken with many of our independent retailers and Save-a-Lot licensees, and met many team members," Duncan stated. "These activities have reinforced my belief that Supervalu has a bright future, and I’m excited to start putting in place plans to improve our results and increase shareholder value."
In a deal announced early last month, Supervalu agreed to sell its Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market chains — a total of 877 stores — and their Osco and Sav-on in-store pharmacies to AB Acquisition LLC, an affiliate of a Cerberus Capital Management LP-led investor consortium. AB Acquisition is the parent of Boise, Idaho-based Albertson’s LLC, which operates 190 supermarkets under the Albertson’s Market banner and two Super Saver Foods stores in eight states. With the acquisition, Albertson’s and its subsidiaries will have 1,069 stores overall and 12 distribution centers.
Following the sale, Supervalu’s retail business will comprise the Save-A-Lot hard discount grocery chain, with about 1,300 stores, as well as the supermarket chains Cub Foods, with 46 stores; Farm Fresh, with 43 stores; Shoppers Food & Pharmacy, with 56 stores; Shop ‘n Save, with 42 stores; and Hornbacher’s, with six stores. The company will also retain its food wholesale operation, which serves 1,950 independent grocery stores nationwide.
After the deal, Supervalu will emerge as a much smaller company, with overall sales of around $17 billion, compared with $36 billion before, and about 1,490 stores in its retail store base, compared with more than 2,400 previously.
Supervalu also will be divesting the majority of its 797 pharmacies, which are located in its nearly 1,100 traditional supermarkets. Save-A-Lot stores don’t have pharmacies. As of the close of its 2012 fiscal year last February, Supervalu was the 11th-largest North American retail pharmacy operator by dollar volume, with pharmacy sales of $2.35 billion, and the 12th-largest by pharmacy count, with 798 in-store pharmacies.
