Beleaguered grocery retailer Supervalu, Inc. (SVU: Quote), which was reviewing strategic alternatives, on Monday named Sam Duncan as its new president and CEO as part of its deal with an investor group led by private-equity firm Cerberus Capital Management L.P. Duncan succeeds Wayen Sales, who will now continue as the executive chairman of the company.
Chairman Sales assumed the additional roles of president and CEO in July 2012 after Craig Herkert was ousted from the company. Sales, aged 62, brings in more than 35 years of retail executive experience. He has been a director of Supervalu since 2006, and non-executive chairman of the Board since 2010.
Eden Prairie, Minnesota-based Supervalu has been facing rough weather lately, as customers switch over to Wal-Mart Stores, Inc. (WMT) and Kroger Co. (KR) seeking lower prices. The stiff competition and higher costs have hurt its bottom line. The company is now trying to curb costs to aggressively lower its prices to improve customer satisfaction.
Supervalu agreed on January 10 to sell five of its retail grocery chains, Albertsons, Acme, Jewel-Osco, Shaw's and Star Market, to an investor group led by Cerberus Capital in a $3.3 billion deal. It also agreed for Cerberus to conduct a tender offer for up to 30 percent of Supervalu's outstanding common stock at a purchase price of $4.00 per share in cash.
Supervalu had then agreed to name Duncan as president and CEO as well as Bob Miller to be named as non-executive chairman following the closure of the acquisition. Miller is the current president and CEO of Albertsons LLC.
Cerberus already owns about 650 Albertsons stores as part of a 2006 acquisition, when Supervalu and a group led by Cerberus acquired Albertson's, Inc. for $17.4 billion.
"Sam is a talented and respected executive with a wealth of industry experience. The Board decided to install Sam as president and chief executive officer before the completion of our previously announced transaction so he can start refining and where appropriate implement plans for the business," Sales said in a statement.
Duncan, aged 61 years, is said to have a reputation as a turnaround specialist for the work he did at OfficeMax, Inc. (OMX) and Midwest retailer ShopKo Stores, Inc. He comes out of retirement to assume the roles at Supervalu, bringing with him more than 40 years of retail experience. He retired as CEO of OfficeMax in 2011 after he took the helm in 2005.
Duncan held various leadership positions from 1992 to 2002 at Fred Meyer Inc., including president of Fred Meyer as well as president of Ralph's Supermarkets. He also worked from 1969 to 1992 at Albertson's Inc.
Duncan most recently served as chairman, president and CEO of OfficeMax from 2005 to 2011. Prior to joining OfficeMax, he served as president and CEO of ShopKo from 2002 to 2005.
In Monday's regular trading session, SVU is currently trading at $3.87, up $0.06 or 1.53% on a volume of 0.45 million shares.
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by RTT Staff Writer
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