Davis, who was with Bristol Farms before it was sold to Albertsons and who ran the chain under both ownerships, is chairman, president and chief executive officer now that Bristol Farms is an independent entity again.
According to Davis, both Albertsons and Supervalu recognized the uniqueness of the Bristol Farms concept and the success it was enjoying, and both pretty much left it alone.
“When Albertsons acquired us in 2004, it was looking for a growth vehicle, and it had stores it thought would fit our format after its merger with Lucky Stores,” Davis recalled. “We believed Albertsons was interested in supporting our growth, and we agreed that it had a lot of locations we thought would work for us.
“Keeping us as a wholly owned subsidiary that operated independently of Albertsons allowed all our management to stay in place and let us run the company. What we weren't aware of when we made the deal, however, was that Albertsons was under severe competitive pressures, which put restrictions on its ability to sustain its growth plans for itself and for us.”
However, Bristol Farms was able to convert two Albertsons stores during its tenure with the Boise, Idaho-based company: one in Westchester, Calif., near Los Angeles International Airport, and one in La Jolla, near San Diego.
“But Albertsons ran into pressures from converting unionized stores to non-unionized stores, so it ceased converting stores to Bristol Farms,” Davis said.
During its years with Albertsons, Bristol Farms acquired a store in Santa Barbara, Calif., called Lazy Acres, which was more oriented toward natural and organic products than Bristol Farms.
When Minneapolis-based Supervalu acquired the bulk of Albertsons in 2006, Bristol Farms was in the mix, and the chain continued as a wholly owned subsidiary.
“Supervalu was very supportive of us as a unique, different company. But the irony is, because Supervalu did not have distribution on the West Coast, it never supplied us.”
Bristol Farms continues to be supplied by Los Angeles-based Unified Grocers, which had been its wholesaler before the chain was acquired by Albertsons.
As Supervalu sought to merge its operations with the ones it had acquired from Albertsons, “it realized it had bigger issues to deal with involving consolidation of its core stores, so it put us on a back burner for growth capital,” Davis said.
“Consequently, I spent a couple of years asking Supervalu to consider divesting Bristol Farms because I felt we could do better if we were privately held, and a year after Craig Herkert came in as CEO and began disposing of bigg's and the Albertsons stores in Utah, I felt the time was right for us to go private again.
“Supervalu didn't want people thinking it was selling off major chains, so it gave us a very narrow window to find a financial partner instead of opening up an auction process to sell Bristol Farms,” Davis explained. “We had interest from several potential partners, but we chose Endeavour Capital because of their experience in retail and because they are in the West, with an office in Los Angeles.”
Endeavour, based in Portland, Ore., was instrumental in helping WinCo grow before selling its stake to the company's employees. Endeavour also has a large investment in New Seasons Markets in Portland and it has also been an investor in C&K Market in Oregon and Northern California.
“As a result of our partnership with Endeavour, there is now capital to help us grow,” Davis said.
Founded as Upscale Store
Bristol Farms was originally founded in 1982 by Irv Gronsky and Mike Burbank, who were not ready to retire after selling their Los Angeles-based fine meat wholesale business.
“They had always been frustrated that retailers didn't handle their meat departments to maximize sales, contending that Styrofoam wrap took away some of the fresh aspects of the product and made the business sterile and boring,” Davis recalled. “So they decided to open a specialty butcher department at a former supermarket in Rolling Hills, Calif., with upscale produce, deli and grocery departments across the rest of the store.
“They came up with the name Bristol Farms because Gronsky lived on Bristol Street and they thought the word ‘Farms’ would make the store sound like they handled fresh products,” Davis noted.
The store was successful, and in 1986 the partners opened a second store in South Pasadena in a former Safeway, “and added more of everything,” Davis said.
They opened their third store, in Manhattan Beach, in 1992, “which almost wiped them out because they built it from the ground up and didn't understand that, at 30,000 square feet, it was too big. But eventually it did become profitable.”
In 1995, Gronsky and Burbank sold Bristol Farms to Kidd Kamm, a private equity firm whose investors included Oaktree Capital. The new owners brought in a record store executive to run the company for a year “before they realized they needed a grocery guy to grow the concept,” Davis said.
Davis had grown up in the Ralphs organization, ending up as senior vice president, marketing, after 23 years with the chain. In 1996, a year after Yucaipa Cos. acquired Ralphs, Davis said he saw Bristol Farms as “a unique entrepreneurial opportunity to do something different.”
He joined Bristol Farms as executive vice president, then was named president six months later and chairman six months after that.
At that point, Oaktree took control of Kidd Kamm, “and they helped us build an infrastructure that allowed us to grow the company,” Davis said.
“But Oaktree told us from the beginning that if we didn't do well, they would sell the company; and if we did do well, they would sell the company.”
In 2004, Oaktree sold the company to Albertsons.