Safeway makes new attempt to sell Dominick's

Safeway, with 1,738 stores throughout North America, may be looking to sell off its Dominick's stores in the Chicago area. The company mentioned Roundy's Supermarkets Inc. of Wisconsin (US) as a possible suitor for Dominick's.

Roundy's CEO, Robert Mariano, is a former CEO of Dominick's. Roundy's was sold to the private equity firm, Willis Stein, in 2002 for US$750 million, but the firm has been unable to sell off the supermarket chain this year. However, Avy Stein, co-founder of Willis Stein, stated last month that if Dominick's went up for sale again, "Roundy's would have an interest in acquiring it." Roundy's operates a chain of 153 grocery the Pick 'n Save, Copps Food Center and Rainbow Foods banners.

Safeway itself, while not discussing sale rumors, is presenting its investment in the Chicago (IL, US) market as an indication of a turnaround by Dominick's, which was viewed by many industry observers as a struggling division that, when it was up for sale in 2003, wouldn't fetch anywhere near the US$1.8 billion Safeway paid to acquire the chain during the late 1990s.

Safeway, which operates 81 Dominick's stores that forms the No. 2 player in the nation's third-largest metropolitan area behind SuperValu's Jewel-Osco chain, has closed 32 locations considered "underperforming" over the past four years. Reports are also circulating that Safeway, may be looking to sell off its 220 Canadian stores.

(Source: East Bay Business Times)