Yesterday the board of directors for Minneapolis-based Supervalu (Acme, Save-A-Lot) said they are considering the sale of all or parts of the company, and will significantly cut expenses and capital spending.
The announcement came after Supervalu’s financial results for its most recent quarter fell below expectations. The company’s net earnings of $41 million were down 45% from the same period last year.
According to company leadership, fiscal 2013 capital expenditures would be reduced from previous estimates of $675 million to $450-$500 million, and operating expense cuts of $250 million can be expected over the next two years. In addition, Supervalu has suspended its dividend and replaced its current credit facility with a real estate backed loan.
In a conference call yesterday with analysts, CEO Craig Herkert said the company was not considering bankruptcy, but analysts believe it’s a possible scenario considering the difficulty Supervalu will most likely face when trying to find a buyer.
Save-A-Lot, Supervalu’s “limited-assortment” brand, is the banner analysts believe would be most attractive to a buyer. Other Supervalu brands include Albertsons, Jewel-Osco, Acme, Shaw’s, Cub Foods and Shoppers.