GREENSBORO, N.C. — Closely held family retailer The Fresh Market has engaged Goldman Sachs to seek outside investment for the first time in a move industry observers say could ramp up expansion of the compact gourmet brand.
“Because of our strong history, recent success and ongoing plans for growing the company, we are in a unique and ideal position right now to consider offers for outside investment,” the company, based here, said in a statement.
The retailer did not specify whether it would look to sell all or only a portion of the company, saying that Goldman would evaluate “a number of opportunities” over the next several months. It suggested, however, that it intends to continue the recent store building spree that has grown it into 78 locations in 19 states. “We continue to post record-breaking results and to sustain an aggressive growth plan in a competitive market due to our distinctive business model and to our employees' unwavering commitment to our customers.”
The Fresh Market operates stores of about 20,000 square feet that specialize in fresh and prepared foods and cater to upscale shoppers in neighborhood locations.
That positioning is at the nexus of several industry trends and portends a growth opportunity, according to industry observers contacted by SN last week.
“Most of the major supermarket chains are talking about small formats and a focus on local and fresh. These are the buzzwords in the industry right now, and Fresh Market is pretty well positioned right there,” said Scott Van Winkle, a consumer and retail analyst at CanaccordAdams, Boston. “The banner alone is a good name in today's environment.”
Fresh Market's upscale appeal is likely also to shelter it from the worst effects of the current economic slowdown, and may help it attract interest from equity investors, added another industry observer, who asked not to be identified.
“My guess is that because they are upscale, they are weathering the storm and doing better than the economy overall,” the source said. “And given the growth in high-end supermarkets, it's probably attractive from an investment perspective.”
The Fresh Market was founded in Greensboro in 1982 by the husband-and-wife team of Ray and Beverly Berry. Ray Berry, a former executive with Southland Corp., parent of 7-Eleven, today serves as chairman of The Fresh Market, and his son Brett is chief executive officer. Its stores utilize classical music, low lighting and handwritten signs to create “experience retail,” similar to that of a restaurant or cafe, and they avert head-to-head competition with supermarkets. A real estate representative of the chain, speaking at a real estate conference a year ago, said Fresh Market in fact likes to locate across the street from an area's leading supermarket.