FINANCE

Report: Cerberus to buy Safeway

BY Staff Writer

New York — Private-equity firm Cerberus Capital Management has reached a preliminary agreement to buy Safeway Inc. for over $9 million, the Wall Street Journal reported. The deal is subject to board approval.

As part of the deal, Cerberus would pay roughly $40 a share for Safeway.

The Kroger Co., which recently completed its acquisition of Harris Teeter, reportedly was also interested in making a bid for Safeway. Even if a deal is announced between Cerberus and Safeway, Kroger could still mount a bid.

Cerberus already owns the Albertsons supermarket chain, which operates some 1,000 stores.

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SMAIndustries says:
Mar-19-2014 01:36 pm

- Deal of the year
$9 Million for 1600 stores across US and Canada would be a deal however the agreement to buy Safeway Inc. was for $9 Billion according to the WSJ.

SMAIndustries says:
Mar-19-2014 01:36 pm

$9 Million for 1600 stores across US and Canada would be a deal however the agreement to buy Safeway Inc. was for $9 Billion according to the WSJ.

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FINANCE

Kroger Q4 profit beats Street; lifts outlook

BY Dan Berthiaume

Cincinnati – The Kroger Co. earned a better-than-expected $422 million in its fourth quarter, down from $462 million in the year-ago period, which included an additional week of sales. The nation’s largest supermarket operator issued a better-than-expected profit for the year ahead.

Kroger’s fourth quarter’s results included expenses related to the company’s $2.5 billion acquisition of Harris Teeter Supermarkets, which closed on January 28, 2014. The quarter’s results also include a LIFO charge of $9.7 million, compared to LIFO credit of $41.2 million in the year-ago period.

Sales for the fourth quarter, ended Feb.1, totaled $23.2 billion, also topping Street estimates, compared to $24.1 billion last year. After adjusting for the extra week, total sales went up by 4.8% (without fuel, total sales increased 4.4%). Same-store sales increased 4.3%, excluding fuel.

The company said its results were enhanced by its response to the harsh winter weather in the fourth quarter.

For the full year, Kroger reported total sales of $98.4 billion, an increase of 3.9% after adjusting for the 53rd week last year. Net earnings for fiscal 2013 totaled $1.52 billion.

Kroger’s full-year net earnings beat Wall Street expectations and were aided by sales from more than 200 Harris Teeter stores acquired in the fourth quarter.

The supermarket operator anticipates same-store sales growth, excluding fuel, of approximately 2.5% to 3.5% for fiscal 2014.

"Our associates’ connection with customers fueled another year of market share growth and record earnings per share," said Rodney McMullen, Kroger’s CEO. "Kroger’s Customer 1st strategy is a powerful foundation on which to continue growing and differentiating our business in 2014."

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SUPPLY CHAIN

Bon-Ton to build e-commerce fulfillment center

BY Dan Berthiaume

York, Pa. – The Bon-Ton Stores Inc. has signed a lease with Duke Realty Corp for a 743,000-sq.-ft., automated, direct-to-consumer fulfillment center in West Jefferson, Ohio, to support its growing e-commerce operations. The company anticipates the facility to be fully operational and ship its first orders in spring of 2015.

The new facility will consolidate the e-commerce fulfillment that is currently being performed at Bon-Ton’s four distribution centers. When fully operational, the fulfillment center will employ approximately 139 net new Ohio associates, with additional seasonal jobs expected to be created during the peak holiday shopping season.

“In response to the rapid growth in our e-commerce business, we are taking this step to ensure extraordinary service to our customers,” said Brendan Hoffman, president and CEO, Bon-Ton Stores. “This new fulfillment center will permit significant expansion of our shipping capacity with improved operational efficiency.”

The consolidation will impact associates involved in the direct-to-consumer fulfillment at the company’s four distribution centers. Affected associates will be offered the opportunity to interview for available positions at the new West Jefferson facility or receive career transition benefits, including severance, according to established practices and state employment service support. Bon-Ton does not expect that the combined severance and other expenses associated with the consolidation, which it expects to incur over the next 16 months, will be material.

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