Independent Grocers Negotiating to Buy 10 Dominick’s
Independent grocery chains affiliated with the Centrella cooperative are in negotiations to buy as many as 10 Dominick’s stores, sources familiar with the talks said.
Grocers affiliated with Centrella, the brand name used by Joliet-based Central Grocers Inc., are looking to purchase stores as a group in both the city and suburbs, sources said. It’s unclear which Dominick’s locations Centrella would buy on behalf of its member firms.
The group has hired food industry investment banker David Schoeder to negotiate the package deal with Dominick’s parent, Pleasanton, Calif.-based Safeway Inc., which announced it would leave the Chicago market.
Mr. Schoeder, a principal with Food Partners LLC in Washington, declined to comment. A Centrella executive could not immediately be reached this evening.
Centrella grocers looking to open stores in soon-to-close Dominick’s around the region include Tony’s Finer Foods, Treasure Island and Strack & Van Til, among others, according to the sources. The co-op has more than 150 members.
Tony Ingraffia, president of South Barrington-based Tony’s Finer Foods Inc., did not return calls. Christ Kamberos, vice president of development at Treasure Island Foods Inc., declined to comment. An executive with Highland, Ind.-based Strack & Van Til did not return a call.
Jewel-Osco, meanwhile, is suspending plans to snap up additional Dominick’s on the market here. The firm, owned by private-equity firm Cerberus Capital Management LP, is no longer looking to buy additional Dominick’s stores that are currently open, said an Itasca-based spokeswoman for Jewel.
When Safeway announced in October that it would leave the Chicago market, the firm operated 72 stores across the region. No more than 55 remain.
Earlier this month, Milwaukee-based Roundy’s Inc. announced a $36 million deal for 11 Dominick’s. Jewel-Osco has purchased four. And Dominick’s leases are expiring at properties in Matteson and Morton Grove and the landlords there are pursuing other options.
A Safeway spokeswoman did not return a call.
Jewel announced its Dominick’s acquisitions in October, stores at 1340 S. Canal St. and 2550 N. Clybourn Ave. in Chicago, and in Homer Glen and Glenview. It’s currently operating those outlets as Dominick’s, with plans to convert them into Jewel stores by mid-January, according to Jewel spokeswoman Allison Sperling.
The grocer won’t buy any more operating Dominick’s stores, Ms. Sperling said. Instead, Jewel will wait to see what’s left after Safeway shutters its chain Dec. 28th.
“In the near future, we will consider any opportunities that arise” to take over closed Dominick’s, said Ms. Sperling, who declined to elaborate further.
Chicago Tribune first reported on Jewel-Osco’s decision not to pursue Dominick’s that are currently open.
In other Dominick’s developments, Safeway did not renew its lease for its store at 4233 W. Lincoln Hwy. in south suburban Matteson. A spokesman for Indianapolis-based Simon Property Group, which owns the retail property that Dominick’s is leaving, said in a recent email that Simon is trying to find a new tenant for the space.
In Morton Grove, Dominick’s lease is expiring in April, a source said, and the landlord plans to pursue a retail-focused redevelopment project there.
Source: Crains Chicago Business Micah Maidenberg December 18, 2013