News Column

Supervalu to Cut 1,100 Jobs

March 26, 2013

Steve Alexander, Star Tribune (Minneapolis)

supervalu

Supervalu said Tuesday it is eliminating 1,100 corporate jobs nationwide, including 600 in Minnesota, after selling about half of its operations last week to Cerberus Capital Management for $3.3 billion.

The cuts represent 35 percent of Supervalu's 3,100 headquarters and regional office employees nationwide.

The 600 Minnesota jobs will be cut from Supervalu's 2,700 corporate and regional office employees in the state, most of them based at Supervalu's Eden Prairie headquarters and Cub Foods' Stillwater headquarters (Cub is owned by Supervalu.)

However, none of the cuts affect the company's nearly 32,000 grocery store or discount store employees. There are thousands of store-level employees at Supervalu's 44 company-owned and 23 franchised Cub grocery stores in Minnesota.

The cuts, which had been anticipated by analysts, are being made now that Supervalu is about half its former size following last week's sale of its four major grocery chains and some other properties to Cerberus. Supervalu last week estimated that its annual sales will now be about $17 billion, or less than half of the $36.1 billion it reported in its last fiscal year.

The sale was largely intended to reduce Supervalu's debt. Supervalu sold the grocery store chains and other properties to Cerberus for $100 million in cash plus the assumption of $3.2 billion in Supervalu debt.

The grocery stores in the deal, including Albertsons, Acme, Jewel-Osco, Shaw's/Star Market, were sold to AB Acquisition, an affiliate of Cerberus. The deal also included the Osco and Sav-On in-store pharmacies.

Supervalu retained Cub Foods stores in Minnesota and four other smaller chains, and collectively they are expected to make up 28 percent of its future sales. Supervalu also kept Save-A-Lot, it's national discount chain, which will constitute 25 percent of revenue. The rest of the company's sales are expected to come from being a wholesale provider to grocery stores nationwide.



Source: (c)2013 the Star Tribune (Minneapolis) Distributed by MCT Information Services


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