By George Anderson
Albertsons announced that it is ending talks to sell the entire company after its Board of Directors decided it was not going to get the type of bid it was looking for to make a deal.
The company did hold out the possibility that it would sell off undisclosed underperforming assets in a smaller transaction.
In an interview with The Idaho Statesman, Albertsons CEO Larry Johnston said he will continue to lead the company and business would be conducted as usual.
"We have a well-documented strategic plan that is updated and approved each January during our annual strategic planning session with senior management and our Board of Directors," he said. "These plans encompass marketing, new formats, visual merchandising, succession planning, premium-fresh positioning, category management, performance management, own brands, supply chain excellence and a three-year technology roadmap. In addition to pursuing that strategic plan we will also continue to implement significant cost reduction and productivity initiatives throughout the company. We began this journey in mid-2001 and have a goal to remove $1.25 billion from our cost structure by year-end 2006. We will also focus every day on growing sales in every store by taking care of our customers better than anyone else, as well as building their loyalty through innovative new merchandising and marketing programs."
According to Mr. Johnston, the process of readying Albertsons for a possible sale gave management a clearer picture of the underlying strength of the company.
"We did a deep dive into every area of our business, and we know a lot more about our strengths and our challenges than we ever have before. Armed with this knowledge, we can move forward decisively to make improvements that will allow us to continue to be one of the nation's largest and best food and drug retailers," he said.
Mr. Johnston said the Board made the decision to explore a possible sale of the company because it didn't feel as though industry analysts were giving the company its due.
"We had become increasingly convinced that our many accomplishments, strong core leadership market positions, and incredible portfolio of assets and real estate were not being properly valued by Wall Street," he said. "We have maintained a relatively strong performance in the face of unprecedented competition, and we have outperformed our traditional competitors in most categories, but we still have seen our shareholder equity under pressure. We have a responsibility to maximize value for the shareholders whose investments are largely responsible for fueling the company's growth and progress."
Moderator's Comment: Where does Albertsons go from here? - George Anderson - Moderator