Skip navigation
savealot

Supervalu to hold bigger piece of spun-off Save-A-Lot

America's Choice to become 'predominant' private brand

Supervalu will retain a 40% interest in Save-A-Lot in the company's planned spin-off of the discount division to a publicly traded, stand-alone company, the distributor said in an SEC filing late Thursday.

Previous projections made in January had Supervalu retaining only 20% of the company. However, officials several weeks ago said that retaining a greater interest would provide Supervalu with the ability to monetize the investment in the future. Existing Supervalu shareholders would own approximately 60% of the shares in the spun-off company in the revised projection.

The amended S-1 document reiterated reasons for separating the companies, a strategy first publicly discussed by Supervalu nearly a year ago.

The deal "will enable each company to focus on its own distinct operations and strategies, and permit the management of each company to concentrate efforts on its unique customers and market conditions."

Supervalu doubled the interest in plans to retain in Save-A-Lot to 40%.
Supervalu doubled the interest in plans to retain in Save-A-Lot to 40%.

Save-A-Lot as a separate company would benefit from stronger relationships with licensees and customers; allow it to make investment decisions better aligned with licensees and customers; and no loner compete for investment capital with wholesaling and other retail divisions under Supervalu. The separation would also provide Save-A-Lot direct access to debt and capital markets, Supervalu added.

The company in the filing also provided additional detail of plans to evolve private labels behind the newly acquired America's Choice brand name.

"Over time, we expect that America’s Choice will become the predominant food private label brand in our stores as we seek to consolidate our private label brand offerings by reducing the number of private label brands that we offer while increasing brand recognition and enhancing brand equity," Supervalu said.

Save-A-Lot stores currently offer around 70 different private brands and plan to reduce that figure to America's Choice "along with approximately five supporting brands."


CONNECT WITH SN ON TWITTER

Follow @SN_News for updates throughout the day.


Save-A-Lot's strategy involves leveraging what it called a "best-in-class" fresh offering; emphasizing local marketing and merchandising; using targeted marketing and promotions to drive store traffic; and improving the "look and feel" inside stores.

Save-A-Lot, which did $4.6 billion in annual sales at 1,360 stores (463 corporately owned and 867 operated by licensees) at fiscal year end Feb. 27, said it sees the potential to operate up to 3,500 stores in the U.S.

The filing did not indicate a date for the separation. Supervalu said Thursday that while is continuing to prepare for a separation "there can be no assurance that a separation of Save-A-Lot will be completed or that any other change in the company’s overall structure or business model will occur."

Suggested Categories More from Supermarket News
TAGS: News Supervalu
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish