Supervalu (NYSE:SVU) is exploring the idea of spinning off its Save-A-Lot brand and making it a stand-alone, publicly traded company.
Save-A-Lot is a hard discount retailer with more than 1,300 stores, comprised of 430 corporate stores and 900 owned by licensees. The company believes the chain has significant growth potential and, since it began refocusing its efforts in the past 2.5 years, is ready to appeal to a broader group of customers.
"We believe a separation of our Save-A-Lot business could allow Save-A-Lot, our independent business and our retail food banners to better focus on their respective operations, and pursue strategies specific to their business characteristics and growth potentials, for the benefit of our shareholders, customers, licensees and employees," said Supervalu's President and CEO Sam Duncan.
The separation is not yet definite and a timetable has not been set. Supervalu has retained Barclays and Greenhill to serve as financial advisors and Wachtell, Lipton, Rosen and Katz as its legal advisor.
Earlier this year, Supervalu began testing out a new concept in some of its Save-A-Lot stores, using format modifications to appeal to different cultural groups. With the exception of plans to grow Save-A-Lot, Supervalu has primarily turned its attention to the wholesale business.
-See this Supervalu press release
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