Acme Supermarkets’ buyer would have to spend heavily to reverse the chain’s fortunes, an analyst said.
Cerberus Capital Management will pay $100 million and assume $3.2 billion in debt to take over five supermarket chains — Acme, Jewel/Osco, Shaw’s, Albertson’s and Star Market. Seller Supervalu (NYSE:SVU) paid $12 billion for the stores in 2006.
Malvern, Pa.-based Acme — with 94 stores and $2.1 billion in sales — is in need of an overhaul to stem recent market-share declines, Jeff Metzler, publisher of Food Trade News, told me Thursday.
\”The stores are too small, they’re pricey, the morale of the associates is apathetic, the merchandising has no sizzle. It would cost hundreds of millions of dollars to get back in shape,\” Metzler said of Acme, once the area’s supermarket leader but now third in market share. \”Will [Cerberus] invest heavy capital in Acme? I don’t think so.\”
Metzler didn’t rule out the possibility that Cerberus might turn around and try to resell Acme.
At the very least, he said, he expects an owner to close older stores and try to reduce expenses, which include payroll for a unionized workforce of 13,000 people.
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