Save Mart bought by private equity firm

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Save Mart bought by private equity firm

Post by cathandler »

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Re: Save Mart bought by private equity firm

Post by storewanderer »

This is not surprising. After Save Mart sold off most (all?) of its real estate in 2020 it became clear something was up. Now it all makes sense. The remodel program, the stronger ads, the better merchandising and execution, it was all to prop the chain up to be sold. The fact that it was not sold to another grocer and went to a small private equity firm that is founded by ex-Cerberus people says a lot as to what happened here.

It will be interesting to see what happens next. I hope the positive momentum of Save Mart that has been happening the past couple years can be maintained. If this private equity wants to generate cash flow (to potentially make additional investments in other unrelated businesses) having a grocery store chain is going to be an excellent foundation from which to build on.

Also if you look at the numbers they say they have 14,000 employees and 200 stores. So an average of 70 employees per store. This doesn't adjust for however many employees at at headquarters or in the warehouse operation either so really it is probably a bit less than that per store. Although I guess the Food Maxx units may skew employee counts down due to the lack of service departments, that employee count speaks a lot as to what kind of volumes they are running. And after they sold off all of that real estate I suspect having "rent expense" to record against a lot of assets that were long paid for, caused some pretty serious issues.
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Re: Save Mart bought by private equity firm

Post by HCal »

I haven't heard of this firm before, but at least they have some experience with retail. Hopefully they aren't looking for a quick flip. I think Save Mart does have potential to be a strong regional player if they play their cards right.
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Re: Save Mart bought by private equity firm

Post by storewanderer »

HCal wrote: March 29th, 2022, 12:36 am I haven't heard of this firm before, but at least they have some experience with retail. Hopefully they aren't looking for a quick flip. I think Save Mart does have potential to be a strong regional player if they play their cards right.
I think they can be a profitable regional player that will provide a stable earnings and cash flow stream to the private equity. The problem is they are down below the top 3 in marketshare in most markets- Sacramento, bay area, and Reno they are in pretty low marketshare positions at this point. I am guessing 4th or 5th place territory. They still have strong marketshare in the central valley cities of Fresno and Modesto (not so sure about Stockton).... but they don't necessarily need to have the first or second market share position if they are running a profitable operation in those markets where they are in 4th or 5th place for marketshare.

Given it is being run by a couple of ex-Cerberus people, maybe these people were around 15 years ago when Cerberus bought the Albertsons LLC operation and have some insight into how that went and the positives about holding a (distressed) grocery operation long term and operating it well within a private equity group. I will forget about the Cerberus group's first couple years where they sold/closed close to 400 stores... after they got done selling things and were down to 200 Albertsons Stores is when their store operations started to shine and they built the foundation to re-grow the chain.
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Re: Save Mart bought by private equity firm

Post by norcalriteaidclerk »

storewanderer wrote: March 29th, 2022, 1:01 am
HCal wrote: March 29th, 2022, 12:36 am I haven't heard of this firm before, but at least they have some experience with retail. Hopefully they aren't looking for a quick flip. I think Save Mart does have potential to be a strong regional player if they play their cards right.
I think they can be a profitable regional player that will provide a stable earnings and cash flow stream to the private equity. The problem is they are down below the top 3 in marketshare in most markets- Sacramento, bay area, and Reno they are in pretty low marketshare positions at this point. I am guessing 4th or 5th place territory. They still have strong marketshare in the central valley cities of Fresno and Modesto (not so sure about Stockton).... but they don't necessarily need to have the first or second market share position if they are running a profitable operation in those markets where they are in 4th or 5th place for marketshare.

Given it is being run by a couple of ex-Cerberus people, maybe these people were around 15 years ago when Cerberus bought the Albertsons LLC operation and have some insight into how that went and the positives about holding a (distressed) grocery operation long term and operating it well within a private equity group. I will forget about the Cerberus group's first couple years where they sold/closed close to 400 stores... after they got done selling things and were down to 200 Albertsons Stores is when their store operations started to shine and they built the foundation to re-grow the chain.
Prior to them taking Cost Plus World Market off of distressed BB&B's hands,nobody had heard of Kingswood Capital Management.Quite frankly,at least Save Mart is in decent hands with a Cerberus offshoot,because we don't need to lose any more retail chains to the likes of Bain Capital(Toys-R-Us didn't need to be killed)or Sun Capital Partners(everything that the touch dies,not just national chains like Mervyns and Musicland but even regionals like Marsh Supermarkets in Indiana).
For your life,Thrifty and Payless have got it.
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Re: Save Mart bought by private equity firm

Post by storewanderer »

norcalriteaidclerk wrote: March 30th, 2022, 12:04 am

Prior to them taking Cost Plus World Market off of distressed BB&B's hands,nobody had heard of Kingswood Capital Management.Quite frankly,at least Save Mart is in decent hands with a Cerberus offshoot,because we don't need to lose any more retail chains to the likes of Bain Capital(Toys-R-Us didn't need to be killed)or Sun Capital Partners(everything that the touch dies,not just national chains like Mervyns and Musicland but even regionals like Marsh Supermarkets in Indiana).
Actually Kingswood was trying to buy Stein Mart but then pulled out of the deal right before COVID. That deal not going through combined with the COVID closures are what led to Stein Mart's liquidation.

I have not seen any positive changes at Cost Plus World Market since Kingswood bought them either. Really I haven't seen any changes other than the installation of some terrible credit card pinpads to the 25 year old IBM registers that do still work well enough (the software on the new pinpads requires the cashier to ask credit or debit before the pinpad will even activate and the pinpad is unable to issue a refund via the "tap" method which is a serious problem since they do accept "tap" like Apple Pay for purchases).
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Re: Save Mart bought by private equity firm

Post by HCal »

storewanderer wrote: March 30th, 2022, 10:16 pm I have not seen any positive changes at Cost Plus World Market since Kingswood bought them either. Really I haven't seen any changes other than the installation of some terrible credit card pinpads to the 25 year old IBM registers that do still work well enough (the software on the new pinpads requires the cashier to ask credit or debit before the pinpad will even activate and the pinpad is unable to issue a refund via the "tap" method which is a serious problem since they do accept "tap" like Apple Pay for purchases).
I think "no changes" would be a good scenario for Save Mart, seeing as Kingswood has no experience with supermarkets.
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Re: Save Mart bought by private equity firm

Post by Romr123 »

storewanderer wrote: March 30th, 2022, 10:16 pm
norcalriteaidclerk wrote: March 30th, 2022, 12:04 am

Prior to them taking Cost Plus World Market off of distressed BB&B's hands,nobody had heard of Kingswood Capital Management.Quite frankly,at least Save Mart is in decent hands with a Cerberus offshoot,because we don't need to lose any more retail chains to the likes of Bain Capital(Toys-R-Us didn't need to be killed)or Sun Capital Partners(everything that the touch dies,not just national chains like Mervyns and Musicland but even regionals like Marsh Supermarkets in Indiana).
Actually Kingswood was trying to buy Stein Mart but then pulled out of the deal right before COVID. That deal not going through combined with the COVID closures are what led to Stein Mart's liquidation.

I have not seen any positive changes at Cost Plus World Market since Kingswood bought them either. Really I haven't seen any changes other than the installation of some terrible credit card pinpads to the 25 year old IBM registers that do still work well enough (the software on the new pinpads requires the cashier to ask credit or debit before the pinpad will even activate and the pinpad is unable to issue a refund via the "tap" method which is a serious problem since they do accept "tap" like Apple Pay for purchases).
I actually have seem some progress at Cost Plus--went into the location in Palm Springs last Oct/Nov, again early January--I primarily shop their food aisles--extremely low stock, though, throughout the store; didn't buy a thing (wasn't sure if it was supply chain problems; was unaware of the change in ownership; though alcohol was roped off in Oct/Nov due to a licensure issue probably related to the change in ownership).

Fast forward six weeks--early March and it looked back to normal, with perhaps a little excess short-dated clearance but nothing out of the ordinary.
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Re: Save Mart bought by private equity firm

Post by Alpha8472 »

Save Mart should emphasize the Lucky brand. If necessary, rebrand some former Lucky stores to Lucky and bring back the old logo. You never know. A name change can do wonders to attract customers.
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Re: Save Mart bought by private equity firm

Post by storewanderer »

Alpha8472 wrote: March 31st, 2022, 11:50 am Save Mart should emphasize the Lucky brand. If necessary, rebrand some former Lucky stores to Lucky and bring back the old logo. You never know. A name change can do wonders to attract customers.
I agree with this but considering they did quietly rebrand Santa Cruz, Monterey, etc. area from Save Mart to Lucky back around 2012, how many stores that used to be Lucky up until 1999, are now branded Save Mart? I can't think of many:
Tahoe City
Truckee
Auburn
Carmichael
Placerville (2)
Sacramento (Gerber, Folsom Blvd., Kiefer, Fair Oaks)
Roseville
Davis
Lodi
Marysville

So using that logic it would not even be hard to convert such a small number of stores back to a better recognized banner. There are some ex-Albertsons units scattered in those territories as well that would probably need to be converted (the NV units, Grass Valley, Chico, Jackson, Elk Grove).

There are a few more scattered around the central valley that Save Mart bought from ASC Lucky around 1997 but I'll ignore those since that is arguably Save Mart's market area.

Also I think they need to return the old red Lucky logo... (they can keep the updated Save Mart and Food Maxx logos...).
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