Apollo Capital investing $1.75 Billion in Albertsons

[klkla]

"The acquisition, described as a “portion” of common stock owned by Albertsons’ current holders—a consortium led by Cerberus Capital Management along with Kimco Realty, Klaff Realty, Lubert-Adler Partners and Schottenstein Stores—would represent 17.5% of Albertsons common stock upon conversion. The deal is expected to close June 15, and comes as Albertsons plans a public stock offering that could take place at any time now."

This seems like a good way to get rid of some more debt before the IPO.

"New York-based Apollo has a long history of investments in food retail with affiliated companies currently owning The Fresh Market and Smart & Final. It said its investment was “based on the firm’s view of Albertsons’ resilient business model, strategy to invest in compelling growth opportunities and proven management team.”

https://www.winsightgrocerybusiness.com ... albertsons

[storewanderer]

Curious how anti trust works with this regarding Smart & Final.

Maybe they can flip some of those Smart & Finals housed in former Haggen locations back to the Albertsons/Vons banners. It would sure serve the customers better.

Cerberus has been invested in Albertsons a lot longer than they usually invest in something, and the IPO plans have de-railed enough times now that one has to assume they want "out."

[retailfanmitchell019]

Curious how anti trust works with this regarding Smart & Final.

Maybe they can flip some of those Smart & Finals housed in former Haggen locations back to the Albertsons/Vons banners. It would sure serve the customers better.

Cerberus has been invested in Albertsons a lot longer than they usually invest in something, and the IPO plans have de-railed enough times now that one has to assume they want "out."

They are underperforming with stores in middle/upper-middle income areas that were previously Albertsons/Vons. People in those areas want the Albertsons/Vons back.
The store in Carlsbad (Carlsbad Village/I-5, former Big Bear/Albertsons/Haggen) is a small store. Store has a layout that isn't typical of Albertsons.
In San Diego (Mira Mesa), S&F took over an Albertsons/Haggen that is too big for them (a 2000 build Grocery Palace that was later remodeled by SVU). This competes with an H-Mart across the street (former Ralphs).
Up in Westlake Village, S&F took over another Albertsons/Haggen (1998 build). Like the 2 stores above, this is an underperforming store compared to Albertsons. There is a Pavilions up the road.

S&F's bread-and-butter for their Extra format seems to be old 60's/70's/80's supermarket buildings. The S&F in Oceanside is an early 80's Safeway that became Vons, closing in 2004. The one in Vista is a former 1973 build Alpha Beta.

A footnote on Big Bear: Big Bear was a supermarket chain in the San Diego area with around 20 stores at its peak. They were supplied by Certified Grocers of LA (predecessor of Unified Grocers). In 1993, the remains of Big Bear would be sold to Fleming and Albertsons (they bought 4 stores).

[klkla]

Up in Westlake Village, S&F took over another Albertsons/Haggen (1998 build). Like the 2 stores above, this is an underperforming store compared to Albertsons. There is a Pavilions up the road.

FWIW this store was an underperforming Albertsons, as well. It's in a shopping center with a Costco and it get overshadowed as a result. The Pavilions is north and in a much wealthier area.

A footnote on Big Bear: Big Bear was a supermarket chain in the San Diego area with around 20 stores at its peak. They were supplied by Certified Grocers of LA (predecessor of Unified Grocers). In 1993, the remains of Big Bear would be sold to Fleming and Albertsons (they bought 4 stores).

I worked at the corporate office for this company for a short period of time when I was in college (the only grocery industry job I truly hated lol). They bought some items from Certified but they had their own distribution center, as well, and had their own private label program.

[pseudo3d]

Curious how anti trust works with this regarding Smart & Final.

Maybe they can flip some of those Smart & Finals housed in former Haggen locations back to the Albertsons/Vons banners. It would sure serve the customers better.

Cerberus has been invested in Albertsons a lot longer than they usually invest in something, and the IPO plans have de-railed enough times now that one has to assume they want "out."

I don't think Smart & Final would interfere with Albertsons very much, they're two different formats anyway. The question is if Apollo eventually plans to integrate S&F and/or Fresh Market with Albertsons...but they (wisely) haven't merged the two of them together, even though they 100% own both.

A footnote on Big Bear: Big Bear was a supermarket chain in the San Diego area with around 20 stores at its peak. They were supplied by Certified Grocers of LA (predecessor of Unified Grocers). In 1993, the remains of Big Bear would be sold to Fleming and Albertsons (they bought 4 stores).

Were they related in any way to Big Bear of Columbus, Ohio?

[buckguy]

One of the very first super markets was a converted warehouse in NJ named "Big Bear". None of the subsequent Big Bears were related to it or each other---they just took the name, much like the many unrelated Stop & Shops (there were two co-op chains with this name in adjacent areas of Ohio), Food Fairs, BiLos, etc.. A lot of early entrepreneurs toured the store, along with King Kullen and other pioneers.

The San Diego Big Bear was a local, family-owned operation that came later than the one in Columbus.

There was a second Ohio Big Bear which was a pioneer discount department store chain. When it entered the Columbus Big Bear's territory, they renamed themselves Giant Tiger, although they never got beyond Big Bear's geographic periphery. They are long gone---renamed and run into the ground by Gaylords, but, early on, a Canadian group liked the stores' format and the name and it carries on into the present as a chain of lower end discount stores in Canada.

The coalition buying a stake in Albertson's is interesting in its own way: A commercial realtor that owns a lot of strip mall/power centers (Kimco), vulture capital (Cerebrus), and a liquidator/operator of big boxes/owner of legacy brands (Schottenstein). The latter bought stores from Albertson's in the past. They all have interests which could affect or be effected by Albertson's future in different ways--Schottenstein could benefit from their success or demise.