LOS ANGELES — Arden Group, parent company of Gelson's Markets , Encino, Calif., said Monday it has initiated a process "to explore and evaluate strategic alternatives," including a possible sale of the company.
A local observer told SN the chain has turned down potential offers from buyers in the past. "But with companies like Fairway , Fresh Market  and Sprouts  doing public offerings to take advantage of all the interest in alternative formats over traditional grocery stores and with the pending sale of Harris Teeter , it shows upscale markets can demand a high price, and all of that could be a catalyst for Gelson's decision to explore alternatives and to think maybe the time is right to formulate an exit strategy at a good price."
Arden said it has retained Moelis & Company, a New York-based investment firm with local offices, as its financial adviser to assist in the review process.
"The company has not made a decision to pursue any specific strategic transaction or any other strategic alternative, and there is no defined timeline for this strategic review," the company said. "There can be no assurance the review .... will result in the consummation of any transactions."
Arden said it was declining further comment until its board of directors determines that further disclosure is appropriate or required.
Arden operates 16 Gelson's Markets in Southern California, with a 17th store scheduled to open in Long Beach, Calif., later this year. The Gelson's operation, founded in 1951 by brother Eugene and Bernard Gelson, was acquired by Arden-Mayfair in 1964, when it had three stores. At the time Mayfair Markets was one of the major chains on the West Coast, with approximately 250 stores, which Mayfair sold or closed over the years and ultimately converted a handful of its remaining stores to the Gelson's banner.
Read more: Arden's Q1 Income Up Nearly 50% 
For the year that ended last December, Gelson's sales were $430 million.
Observers said they doubted Gelson's, a union operation, would be sold to a non-union operator, though they pointed out that Bristol Farms has gotten around that issue by forming a separate holding company, Good Food Holdings, which enabled it to acquire six unionized Metropolitan Markets in Seattle last fall. Besides those six, Bristol operates 12 stores under the Bristol Farms banner and two under the Lazy Acres banner, in partnership with Endeavour Capital, Portland, Ore. Executives at Bristol declined comment.
|Suggested Categories||More from Supermarketnews|