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Gelsons_Markets_store_exterior.jpg Gelson's Markets
Gelson's had changed ownership seven years ago when TPG Capital acquired the upscale grocer from onetime parent company Arden Group.

Gelson’s Markets to be sold to Japanese retailer PPIH

Owner TPG Capital slated to close transaction in second quarter

Southern California grocer Gelson’s Markets is being acquired from owner TPG Capital by Tokyo-based Pan Pacific International Holdings (PPIH), the parent company of Japanese retailers Don Quijote Co. Ltd. and Marukai Corp.

Financial terms of the agreement, announced late Tuesday, weren’t disclosed. Encino, Calif.-based Gelson’s operates 27 upscale supermarkets from Santa Barbara to San Diego, mostly along the Southern California coast and in the Los Angeles area but also with one location in Rancho Mirage, near Palm Springs. The chain is slated to mark its 70th anniversary in July.

Private equity firm TPG Capital and PPIH are expected to finalize the deal in the second quarter, pending customary closing conditions.

“We have long appreciated TPG’s understanding of the Gelson’s brand and its strong support over the past seven years, from financing newly built and acquired stores to investing in our Santa Fe Springs distribution center,” Rob McDougall, president and CEO of Gelson’s, said in a statement. “As we look to the future, we are excited about opportunities for new growth and partnerships under PPIH, while remaining focused on our longtime commitment to the highest standards of quality, value and unsurpassed customer service. PPIH leadership has visited every one of our locations and has been incredibly complimentary of our stores and teams, as well as our customer service philosophy.”

San Francisco- and Fort Worth, Texas-based TPG acquired Gelson’s in February 2014 as part of its purchase of the grocer’s then-parent company Arden Group. The $394 million cash deal with Los Angeles-based Arden was announced in December 2013, at which time Gelson’s operated 17 stores. Arden had indicated plans to explore a possible sale of Gelson’s in the summer of 2013.

“We are incredibly proud of all we’ve accomplished with Rob and the Gelson’s team over the past seven years,” commented Paul Hackwell, partner at TPG Capital. “Together, we’ve been able to meaningfully grow Gelson’s footprint while maintaining the qualities that make the brand so special: its expansive but localized offering, focus on quality and freshness, and unwavering commitment to customer service. We thank the entire Gelson’s team for their partnership and wish them continued success as they enter their exciting next chapter with PPIH.”

Gelson’s describes itself as an operator of “specialty grocery stores.” Its locations offer the full amenities of a traditional supermarket but with “the local flavor of a neighborhood market,” emphasizing a high level of service — including in-house culinary experts in tune with Southern California’s lifestyle — and fresh foods, such as hand-selected produce, premium meat and seafood, and chef-prepared signature recipes. Gelson’s stores also offer professionally designed floral arrangements, and about a dozen locations house wine bars, where customers can sample the retailer’s own-brand fine wine collection.

“We strongly respect Gelson’s brand and history of 70 years known as a premium supermarket chain in the U.S.,” stated Naoki Yoshida, president and CEO of Pan Pacific International Holdings. “We have set our footprint in the state of California when we acquired Marukai Corp. in 2013, and we look forward to expanding our presence in California and dedicating ourselves to satisfying customers who value quality products, cleanliness, convenience and personal service. We feel excited to work with Gelson’s team to accelerate future growth.”

Overall, PPIH operates 638 international stores, including 582 in Japan. The company, founded more than 40 years ago by entrepreneur and innovator Takao Yasuda, is known mainly for its Don Quijote discount stores. PPIH also operates stores in Hawaii and California — under the Don Quijote, Marukai, Tokyo Central, Big Save and Times banners through Marukai Corp. USA — as well as in Singapore, Hong Kong, Thailand and Taiwan.

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