Save Mart adds Bob Miller to Board

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Re: Save Mart adds Bob Miller to Board

Post by storewanderer »

HCal wrote: February 5th, 2023, 9:06 pm
storewanderer wrote: February 5th, 2023, 10:21 am

The formula to calculate the sale price of stores to SpinCo is already defined in the merger agreement. I consider that formula to represent the "floor" value for the stores being sold. There are different formulas depending if the store is a Kroger or an Albertsons. I also found it odd the merger agreement spelled out those different formulas since as you interpret, which I too interpreted, the way the agreement reads, SpinCo would be made up of only Albertsons Stores.
Interesting, may I ask where you got this information? Have they publicly disclosed the agreement and the formula?
Yes, it is in the merger agreement, do a search/find for SpinCo. This is the SEC Merger Filing document (97 page file).

This is how they define it, with regards to establishing a price to charge SpinCo for stores:

Other thing I see is they have targeted a date in October 2023 to have this whole SpinCo plan/allocation of assets determined.

“Four-Wall EBITDA” means, for the thirteen four-week periods ending on the last day of
the four-week period nearest to, and at least thirty (30) days prior to, the Closing Date, (i) with respect to
a Company Store, Store-level retail EBITDA (including as it relates to any fuel center associated with
such Store) for such period, excluding allocated division and corporate overhead costs, and (ii) with
respect to a Parent Store, EBITDA (including as it relates to any fuel center associated with such Store)
as reported on such Store’s operating statement for such period, excluding intracompany rent costs,
division overhead allocation costs, corporate overhead allocation costs and technology allocation costs, in
each case of clauses (i) and (ii), calculated in a manner consistent with the historical methodology and
practice of the Company and Parent, as applicable, in each case of (i) and (ii) in accordance with an
illustrative example set forth in Section 1.1(a) of the Company Disclosure Letter."
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Re: Save Mart adds Bob Miller to Board

Post by veteran+ »

storewanderer wrote: February 5th, 2023, 8:57 pm
Bluelightspecial wrote: February 5th, 2023, 8:54 pm

I completely agree. There are Albertsons/Safeway stores in Seattle, Portland, SoCal and possibly Dallas that could generate higher income if sold outside of the Spinco group of stores.
Where this is going to get really interesting is what operators buy those stores. In a lot of instances the buyer who will pay more is very likely to be a non-union operator. So I wonder what will happen. The unions will not like that. That may lead to SpinCo getting a good deal on some prime stores.

In SoCal at least there is Gelson's who can buy stores and is union. But are they in a shape to buy more stores?
I am not sure about Gelson's "shape" but I find their "value proposition" lacking in a similar way to Jenson's in the desert.

What you pay and what you get is off balance. IMO, you are not getting the best bang for your BIG bucks $$$
Last edited by veteran+ on February 7th, 2023, 9:39 am, edited 1 time in total.
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Re: Save Mart adds Bob Miller to Board

Post by retailfanmitchell019 »

I wonder if Ahold will be involved in this. I think Save Mart/SpinCo could go into Ahold.

For store brands, I expect Save Mart will transition away from Topco brands and go with Signature brands. A chain with over 500 stores, which Save Mart will be, can have their own brands.
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Re: Save Mart adds Bob Miller to Board

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retailfanmitchell019 wrote: February 6th, 2023, 2:16 pm I wonder if Ahold will be involved in this. I think Save Mart/SpinCo could go into Ahold.

For store brands, I expect Save Mart will transition away from Topco brands and go with Signature brands. A chain with over 500 stores, which Save Mart will be, can have their own brands.
That may be something that happens in the distant future but not in this step.

I think we need to see what ends up happening in terms of banner before determining what Save Mart ends up doing. Also I am making a lot of assuming about what appears to be happening. Who knows, maybe some other investment group could want these stores too. But it is going to be tough for any other buyer to demonstrate the strong management team Save Mart has assembled, if not impossible for any other buyer to.

If Save Mart is just a short term vehicle to load these divested stores into then ultimately be sold off to other parties (or another party like Ahold) then it will ultimately be using Ahold/other party private labels so it is hard to say what the best move on private label will be. Save Mart has its own private label with Sunny Select representing most basic level grocery items but is TopCo brands or in some cases just generic packer brands (Full Circle, Cravn, Top Care, Paws, etc.).
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Re: Save Mart adds Bob Miller to Board

Post by retailfanmitchell019 »

storewanderer wrote: February 6th, 2023, 11:56 pm If Save Mart is just a short term vehicle to load these divested stores into then ultimately be sold off to other parties (or another party like Ahold) then it will ultimately be using Ahold/other party private labels so it is hard to say what the best move on private label will be. Save Mart has its own private label with Sunny Select representing most basic level grocery items but is TopCo brands or in some cases just generic packer brands (Full Circle, Cravn, Top Care, Paws, etc.).
I'd think Ahold would be the most likely buyer for SpinCo/Save Mart stores. Ahold has been talking on and off about going west for at least 25 years. I think they had talks with Stater and Raley's at one point.
Less likely to happen, but I still think Loblaw could be a great acquirer for SpinCo/Save Mart. Loblaw would clean up the stores and give them better store brands, quality, and pricing. No wonder they are #1 in Canada.
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Re: Save Mart adds Bob Miller to Board

Post by storewanderer »

retailfanmitchell019 wrote: February 9th, 2023, 6:31 pm
storewanderer wrote: February 6th, 2023, 11:56 pm If Save Mart is just a short term vehicle to load these divested stores into then ultimately be sold off to other parties (or another party like Ahold) then it will ultimately be using Ahold/other party private labels so it is hard to say what the best move on private label will be. Save Mart has its own private label with Sunny Select representing most basic level grocery items but is TopCo brands or in some cases just generic packer brands (Full Circle, Cravn, Top Care, Paws, etc.).
I'd think Ahold would be the most likely buyer for SpinCo/Save Mart stores. Ahold has been talking on and off about going west for at least 25 years. I think they had talks with Stater and Raley's at one point.
Less likely to happen, but I still think Loblaw could be a great acquirer for SpinCo/Save Mart. Loblaw would clean up the stores and give them better store brands, quality, and pricing. No wonder they are #1 in Canada.
We don't know what Save Mart will look like if they pick up additional stores. Will they own the stores or sell off the real estate (Save Mart sold off a ton of real estate before the company was sold to the investment firm)? Will they close pharmacies in stores they acquire if they acquire stores? I am not clear what the pharmacy and real estate strategies of Ahold and Loblaw's are but these are two characteristics of the current Save Mart operation as it stands that cause me to pause and be unsure of Save Mart's value to a potential purchaser.

Does Stater own much real estate? We know they don't do pharmacy either but many of them are in a shopping center with a drug store so there is that.
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Re: Save Mart adds Bob Miller to Board

Post by ClownLoach »

storewanderer wrote: February 9th, 2023, 11:34 pm
retailfanmitchell019 wrote: February 9th, 2023, 6:31 pm
storewanderer wrote: February 6th, 2023, 11:56 pm If Save Mart is just a short term vehicle to load these divested stores into then ultimately be sold off to other parties (or another party like Ahold) then it will ultimately be using Ahold/other party private labels so it is hard to say what the best move on private label will be. Save Mart has its own private label with Sunny Select representing most basic level grocery items but is TopCo brands or in some cases just generic packer brands (Full Circle, Cravn, Top Care, Paws, etc.).
I'd think Ahold would be the most likely buyer for SpinCo/Save Mart stores. Ahold has been talking on and off about going west for at least 25 years. I think they had talks with Stater and Raley's at one point.
Less likely to happen, but I still think Loblaw could be a great acquirer for SpinCo/Save Mart. Loblaw would clean up the stores and give them better store brands, quality, and pricing. No wonder they are #1 in Canada.
We don't know what Save Mart will look like if they pick up additional stores. Will they own the stores or sell off the real estate (Save Mart sold off a ton of real estate before the company was sold to the investment firm)? Will they close pharmacies in stores they acquire if they acquire stores? I am not clear what the pharmacy and real estate strategies of Ahold and Loblaw's are but these are two characteristics of the current Save Mart operation as it stands that cause me to pause and be unsure of Save Mart's value to a potential purchaser.

Does Stater own much real estate? We know they don't do pharmacy either but many of them are in a shopping center with a drug store so there is that.
I'd wager that Stater is in the same boat as Kroger and Albertsons with a 50/50 mix of owned vs leased. I would assume Stater owns the majority of their older stores which are concentrated in Riverside and San Bernardino counties, usually are about 30,000 Sq ft cubes and are by themselves (not in a larger center). They seem to be trying to get rid of most of these especially in Orange County where I believe they have closed at least 5 of them in recent years (Buena Park area, at least three in Westminster although one I think they're now the landlord for Northgate, one in Costa Mesa that is now Smart & Final). The newer stores in multi tenant centers I'm going to assume are all leased. But I think they have built some owned stores in the IE in the last ten years or less; they're just good at finding the right opportunity to open lease or own.

Separately, my observation is that Stater is struggling a bit with all of this inflation and they have lost a lot of their edge with pricing. They were consistently much cheaper than Ralphs and Albertsons/Vons but they are catching up. They are definitely less promotional than the past and have an awful lot of "must buy 4" or "must buy 5" on 4 for $10 type sales. And what I am most concerned about is that there is definitely a reduced sense of cleanliness in their stores. New or old they used to be exceptionally clean at all times. Now I'm noticing floors that look overdue for a strip, burned out lights in stores that haven't had a LED retrofit, and the worst of all "bad odors." I had an unusual comparison made of two 100% brick by brick identical stores (both 1999 Era Albertsons builds where both still have lights that turn in different directions although aisles are all same now), the Stater Bros on Temecula Parkway and the Albertsons on California Oaks Rd Murrieta. The Stater Bros is not clean, has mothballed displays when you first enter such as a counter that houses a soda fountain now removed and a covered up self serve soup bar, vacant pharmacy counter that still has signs up, and just felt very dated due to wear tear and odor. The Albertsons has dated LLC decor, yet it has been better taken care of. No bad odors, that old deli island has been replaced with a smaller fixture, although it has ancient turntable checkouts the store doesn't seem to be as neglected feeling as that Stater.
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Re: Save Mart adds Bob Miller to Board

Post by veteran+ »

retailfanmitchell019 wrote: February 9th, 2023, 6:31 pm
storewanderer wrote: February 6th, 2023, 11:56 pm If Save Mart is just a short term vehicle to load these divested stores into then ultimately be sold off to other parties (or another party like Ahold) then it will ultimately be using Ahold/other party private labels so it is hard to say what the best move on private label will be. Save Mart has its own private label with Sunny Select representing most basic level grocery items but is TopCo brands or in some cases just generic packer brands (Full Circle, Cravn, Top Care, Paws, etc.).
I'd think Ahold would be the most likely buyer for SpinCo/Save Mart stores. Ahold has been talking on and off about going west for at least 25 years. I think they had talks with Stater and Raley's at one point.
Less likely to happen, but I still think Loblaw could be a great acquirer for SpinCo/Save Mart. Loblaw would clean up the stores and give them better store brands, quality, and pricing. No wonder they are #1 in Canada.
What do you think of Lidl? Unlike Aldi, their stores are larger.
Last edited by veteran+ on February 11th, 2023, 8:55 am, edited 1 time in total.
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Re: Save Mart adds Bob Miller to Board

Post by retailfanmitchell019 »

veteran+ wrote: February 10th, 2023, 9:16 am What do you think of Lidl? Unlike Aldi, there stores are larger.
Aldi and Lidl are not buying the stores, they are union shops, unless they are carved up for real estate in a Lampert-esque plan.
I've never been to Lidl. I'm not much of an Aldi fan.
storewanderer wrote: February 9th, 2023, 11:34 pm I am not clear what the pharmacy and real estate strategies of Ahold and Loblaw's are but these are two characteristics of the current Save Mart operation as it stands that cause me to pause and be unsure of Save Mart's value to a potential purchaser.
Both Ahold and Loblaw operate pharmacies. In fact, Loblaw bought Shoppers Drug Mart in 2014. Shoppers is the largest drug store chain in Canada- it's like their equivalent to CVS.
ClownLoach wrote: February 9th, 2023, 11:41 pm I had an unusual comparison made of two 100% brick by brick identical stores (both 1999 Era Albertsons builds where both still have lights that turn in different directions although aisles are all same now), the Stater Bros on Temecula Parkway and the Albertsons on California Oaks Rd Murrieta.
That's the Albertsons 1996 era model, with this layout, but flipped, in the case of this store in Omaha:
https://www.newspapers.com/clip/1148917 ... 0s-layout/
The Stater Bros. in Encinitas is a clone of those Temecula and Murrieta stores.
1999 model is the Grocery Palace:
http://1.bp.blogspot.com/-tHTmaGSKsuU/U ... Layout.jpg
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Re: Save Mart adds Bob Miller to Board

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retailfanmitchell019 wrote: February 10th, 2023, 12:31 pm
Both Ahold and Loblaw operate pharmacies. In fact, Loblaw bought Shoppers Drug Mart in 2014. Shoppers is the largest drug store chain in Canada- it's like their equivalent to CVS.
Some of those Shoppers Drug Mart have the pharmacy run by an independent party. I noticed when shopping in those stores in some stores the receipt would list some other business name for the pharmacy like LIV RX LTD or "healthwatch pharmacy" or some other random name. I think Loblaw controlled the front end in those stores but am not even sure of that.
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