SUPERVALU Closes Stores, Continues Surrender
SUPERVALU Inc. (NYSE: SVU), nearly beaten to death over the last several months by Wall St., will close roughly 60 stores and take a charge as high as $90 million. The company may add $10 million in revenue from sales of store assets. SUPERVALU said it will shutter
underperforming or non-strategic stores this fiscal year including 38 in its retail food reporting segment and 22 Save-A-Lot locations. The majority of the stores are expected to close before December 1, 2012, the end of the Company's fiscal 2013 third quarter
The firm added:
Over the next three years, the Company estimates that closing these locations will generate between $80- $90 million in cash from monetizing owned real estate, eliminating cash operating losses, and selling departmental assets. The Company owns the real estate for approximately one-third of the retail food stores being closed. Cash generated from these actions will be used to reduce outstanding debt and for other general corporate purposes. These closures will also be accretive to net earnings.
SUPERVALU's stock currently trades at $2.24, down from a 52-week high of $8.75. When the company announced poor quarterly earnings in July, it suspended its dividend and said its board would consider strategic options. Nothing has come from those actions, and investors have become desperate about the firm's prospects.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Earnings, Retail Tagged: featured, SVU