CLOUDY FUTURE PUTTING ALBERTSONS EXECUTIVES ON MARKET

BOISE, Idaho -- The potential sale of Albertsons here is already having an impact on the industry -- in the form of a surge in the number of the company's senior-level employees who have suddenly made themselves available for hire.Resumes from fearful workers at the nation's No. 2 operator of traditional supermarkets have already begun to pour into the in-boxes of recruiters, an executive at one such

BOISE, Idaho -- The potential sale of Albertsons here is already having an impact on the industry -- in the form of a surge in the number of the company's senior-level employees who have suddenly made themselves available for hire.

Resumes from fearful workers at the nation's No. 2 operator of traditional supermarkets have already begun to pour into the in-boxes of recruiters, an executive at one such job placement firm told SN.

Albertsons, which declined to comment to SN for this article, said last month that it was pursuing strategic alternatives, including the potential sale of all or part of the company. Sources close to the investment community told SN last week that the company is shopping itself both as a whole entity and in two divisions, one containing core assets and another containing non-core assets.

Bill Bishop, president, Willard Bishop Consulting, Barrington, Ill., said he thinks investors see Albertsons as a company with high potential as a much smaller business.

"That will probably bring with it smaller opportunities for people at the corporate level," he said. He noted that Albertsons has assembled "an exceptionally strong team of executives," and that some recruiting by rival retail firms "is inevitable."

Asked about a potential executive exodus at Albertsons, Jose Tamez, managing partner of the executive search firm Austin Michaels, San Antonio, Texas, pointed out that corporate destabilization like what's under way at Albertsons is a double-edged sword for executives. While many are likely to be displaced, others may find new opportunities with the firms that take over ownership of individual Albertsons divisions.

If another company were to buy Shaw's, for example, he said, the new owner would probably have to replace some of the senior management team that Albertsons eliminated when it acquired the chain last year.

"The new owners would have to load up with management again, and that's where opportunities will be created," he said. "A shake-up like that benefits some, and works to the detriment of others."

Burt P. Flickinger III, managing director, Strategic Resource Group, New York, disagreed that Albertsons could lose some high-level executives as it goes through the sale process.

"I think the Albertsons sale may actually be better for people working at Albertsons," he said. "As the private-equity firms look at purchasing Albertsons, they will want to retain the top talent."

He also suggested that new owners might bring back some of the executives who have left in recent years, including some former managers at American Stores, with which Albertsons merged in 1999.

Equity analysts who follow Albertsons said they expect the company to bleed sales as it goes through the sale process.

"It's a serious matter, and it's a grave consequence of putting a company on the block as they did," said Gary Giblen, director of research and senior vice president, Brean Murray, New York. "When a company files bankruptcy or is for sale, the best people jump ship, and at the store level, service slips and shrink picks up."

He said even those executives who choose to stay with the company may have "mentally walked out," knowing that their futures are uncertain. "Even Larry Johnston [Albertsons' chairman and chief executive officer] may be thinking about his own 'endgame,"' Giblen said, using a term Johnston himself used to describe the chain's strategic goals.

Perry Caicco, an analyst with CIBC World Markets, Toronto, said in a report that Albertsons' store-level conditions are in danger of deteriorating.

"Supermarkets designated, or even hinted to be 'non-core' assets; companies or divisions that are up for sale; chains facing restructuring; regions starved for capital -- all of these have a material impact on the morale and efficiency of store managers and ground-level employees," he wrote. "This happens because employees top to bottom become primarily concerned about keeping their jobs. Pricing, merchandising and customer service become secondary concerns. Fliers weaken, pricing is not as sharp, store conditions deteriorate, and customer service evaporates."

Bishop of Willard Bishop Consulting, however, said he thinks Albertsons' store personnel may be more committed to their jobs than higher-ups. "This kind of uncertainty may be more of a concern for people at the corporate headquarters, because a lot of these stores are quite viable in their own right. I'd be surprised if people at retail got spooked as much as people at corporate, who know today they are at quite a large chain and may be contemplating being at a somewhat smaller one."