Save A Lot has taken another step in its transition to a wholesale business model with the sale of 32 stores in the Cleveland, Chicago and Milwaukee areas to a local operator.
The St. Louis-based discount grocer said Tuesday that it has completed deals to sell the Save A Lot supermarkets to Yellow Banana LLC. Financial terms of the transaction weren’t disclosed. Yellow Banana is part of 127 Wall Holdings LLC, a minority-owned holding company co-founded by Walker Brumskine, Ademola Adewale-Sadik and Michael Nance, who are joined by veteran operator and 127 Wall Holdings co-founder Joseph Canfield, who serves as Yellow Banana’s CEO.
“We are thrilled to have the passionate team at Yellow Banana join our Save A Lot network,” Chris Hooks, executive vice president and chief merchandising officer at Save A Lot, said in a statement. “Their mindset and commitment to service, together with Save A Lot’s mission of providing convenient access to high-quality foods, will be a winning combination. Their near-term investment to substantially and visibly upgrade all stores will only further lead to a profound impact on how customers enjoy the Save A Lot experience for many years to come.”
Plans call for Yellow Banana, a retail grocery-focused subsidiary of 127 Wall, to retain the Save A Lot banner and discount format as well as all of the stores’ 400-plus associates, maintaining their current wages, health insurance and retirement benefits.
“We are thrilled to partner with Save A Lot on this opportunity to invest in underserved, predominantly minority communities in three major cities,” Brumskine commented. Ademola Adewale-Sadik added, “As the COVID-19 pandemic has made clear, providing affordable, high-quality nutrition to working families is an essential service that creates meaningful impact.”
Yellow Banana said it aims to broaden each store’s assortment of local and regional products and hire from local communities. All of the stores are slated to be significantly remodeled in 2022 to reflect Save A Lot’s latest branding, including new decor, upgraded flooring and lighting, and updated produce and meat cases.
“In many cases, our stores are the only accessible option for healthy, affordable groceries,” Canfield stated, “and we will work hard to earn our place as the beloved hometown grocer across our communities.”
The 32 stores acquired by Yellow Banana generate combined annual revenue of more than $130 million, which makes Yellow Banana one of Save A Lot’s largest retail partners, the companies said.
“It is an honor to invest in communities like the one in which I was raised,” commented Nance, who grew up frequenting one of the Cleveland-area Save A Lots now owned by Yellow Banana. “The philosophy that guides our collaboration with Save A Lot is centered on providing both food and job security to those communities that are most in need.”
In December, Save A Lot announced it was shifting to a wholesale-focused business, a move that entails the sale of more than 300 corporate-operated stores to current and new retail partners. At the time, the company had 14 distribution centers and more than 1,000 stores in 33 states, with the vast majority of the locations licensed by over 200 independent grocers. Plans call for Save A Lot to retain 21 corporate-operated stores in St. Louis to serve as testing sites for retail partners.
Upon announcing the strategy, Save A Lot said it had enacted seven sale transactions encompassing 82 company-operated stores, with other deals nearing completion. Most recently, in late May, the company said it sold five Washington, D.C.-area stores in Maryland to independent retailer AQS Foods LLC.
In July, Save A Lot unveiled plans to remodel a third of its store base in 2021 and upgrade the rest of the stores by 2024. Currently, the company has about 1,000 stores in 32 states.
Corbel Capital Partners served as financing partner for the transaction with Yellow Banana, and Squire Patton Boggs served as legal counsel.
“We expect this to be only the start of future growth and collaboration with 127 Wall Holdings, Corbel and Save A Lot,” stated Michael Jones, principal at Corbel Capital Partners.