Roundys to exit Twin Cities market
Minneapolis-based Roundy’s Inc. announced that it has entered into definitive agreements to sell 18 Rainbow stores in the Twin Cities market to a group of local grocery retailers, including Supervalu Inc., Eden Prairie, Minn. According to Robert Mariano, president and CEO of Roundy’s, the recent economic downturn and increased competitive footprint in the Twin Cities market have made it difficult for Roundy’s to keep the Rainbow banner competitive.
“However, we believe the sale of these Rainbow stores to this group of local operators will provide those stores better stewardship in serving their communities in the Minneapolis/St. Paul market going forward,” he stated. “The transaction will also allow us to better focus strategically on growing our Mariano’s banner in the Chicago market and strengthening our business in our core Wisconsin markets.”
Supervalu Inc. said the agreement — which it made in partnership with Jerry’s Enterprises, Haug Enterprises, Lund Food Holdings and Radermacher Enterprises — will total approximately $65 million plus inventory. In total, the group agreed to acquire the 18 Rainbow stores, which include 13 Rainbow pharmacies and three Rainbow liquor stores. Once the acquisition is completed, the acquired stores are intended to be operated by Supervalu, a Cub Foods franchisee or an independent retailer as 10 Cub Foods locations, two Byerly’s locations and six Rainbow locations. Of the 18 stores, Supervalu will have 100 percent ownership in the three Cub stores, majority ownership in two Cub stores, minority ownership in three Cub stores, and 100 percent ownership in two Rainbow stores, as well as 100 percent ownership interest in 11 pharmacies. The transactions are subject to customary closing conditions and expected to be completed by the end of the summer.
“Supervalu is thrilled to participate in this consortium of retailers that is acquiring Rainbow stores,” said Sam Duncan, Supervalu’s president and CEO. “We’re especially pleased that highly respected independent retailers here in the Twin Cities are also acquiring Rainbow stores. These independent retailers are great customers to Supervalu who understand the importance of being a strong community grocer.”
Roundy’s stated that it is actively seeking additional buyers for its remaining nine Rainbow stores. At the conclusion of that process, it expects to either sell or close the remaining stores and fully exit the Twin Cities market.