Central Grocers in talks to sell some stores to strategic

21 April 2017

by Danielle Randall-Saba, and Jon Berke

 

Central Grocers is in talk to sell 22 of its Strack & Van Til grocery stores to supermarket giant Albertson’s, according to two sources familiar with the matter. The distressed grocer has been exploring restructuring and strategic alternatives, including a sale of its retail grocery chains.

 

Management is working with advisors from Conway Mackenzie along with restructuring lawyers at Weil Gotshal, as first reported by Debtwire. Peter J Solomon has also been assisting management, one of the sources noted.

 

Central Grocers has struggled to maintain market share as shoppers forgo traditional supermarkets in favor of large retailers like Wal-Mart Stores, Costco and 99 Cent Only Stores, as reported.

 

The Strack & Van Til is a “fairly profitable” grocery chain, and the entire Stack & Van portfolio of stores could garner up to USD 30m in a sale, as previously reported by Debtwire.

 

On 19 April, Central Grocers was hit by a lawsuit from International Brotherhood of Teamsters Union Local 703 in federal court attempting to block it from divesting portions of its businesses or the company as a whole to an unknown suitor, the Times of Northwest Indiana reported.

 

The Peter J Solomon mandate was first reported by Reuters yesterday afternoon.

 

Both Albertson’s and Central Grocers declined to comment.