Albertsons files for IPO
July 8, 2015
by Erica Shaffer
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Albertsons is confident in its ability to drive sales growth.
BOISE, Idaho – Albertsons Companies Inc. has filed with the Securities and Exchange Commission for a proposed initial public offering. The supermarket chain did not disclose the number of shares to be offered.
Albertsons is owned by private equity firm Cerberus Capital Management LP. Cerberus bought Safeway and combined it with Albertsons in January. Albertsons is one of the largest food and drug retailers in the US, with stores in 33 states and the District of Columbia. The chain includes 18 well-known names including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market and Carrs.
In fiscal 2014, the company reported identical store sales growth of 8.2 percent across the SuperValu Albertsons Stores, and 9.1 percent across the New Albertsons Inc. stores. Safeway stores reported identical store sales growth of 3.0 percent in fiscal 2014, compared to 1.4 percent in fiscal 2013.
Albertsons expressed confidence in the company’s ability to accelerate sales growth. Additionally, the company believes the experience of its management team combined with the acquisition and integration expertise of its private equity sponsors such as Cerberus and others positions Albertsons well for future acquisitions.
“Our operating philosophy is simple: We run great stores with a relentless focus on sales growth,” the company said in its SEC filing.
“Growth through acquisition is an important component of our strategy, both to enhance our competitiveness in existing markets (as with recent acquisitions for our Jewel-Osco banner) and to expand our footprint into new markets (as with the United acquisition),” the company added. “We have developed a proprietary and repeatable blueprint for integration, including a clearly defined plan for the first 100 days.”
Upgrades and enhancements to the chain’s fresh, natural and organic offerings across meat, produce, service deli and bakery departments also figure in Albertsons’ growth plan. The company said it plans to drive sales and profitability by offering its store brands — O Organics, Open Nature, Eating Right and Lucerne — across its banners.
“We also believe that continued innovation and expansion of our high-volume, high-quality and differentiated signature products will contribute to stronger sales growth,” Albertsons said.
Following its acquisition of Safeway, Albertsons implemented a synergy plan aimed at capturing $800 million from the acquisition by the end of fiscal 2018, with associated one-time costs of approximately $690 million.
“The plan includes capturing opportunities from corporate and division cost savings, simplifying business processes and rationalizing headcount,” the company said. “Over time, Safeway’s information technology systems will support all of our stores, distribution centers and systems, including financial reporting and payroll processing, as we wind down our transition services agreement for our Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market banners with SuperValu on a store-by-store basis. We anticipate extending the expansive and high-quality own brand program developed at Safeway across all of our banners.
“We believe our increased scale will help us to optimize and improve our vendor relationships,” Albertsons added.