Another mass layoff of 1,000 employees as Minnesota-based Supervalu, Inc. continues to restructure its retail operations to transform its business into an even larger nationwide wholesale supplier of grocery to other retailers.
In this phase, Supervalu will abandon the 60-year old Farm Fresh brand and its stores and pharmacies serving Virginia and North Carolina. Some of the stores will be sold to other retailers who may accommodate some of the displaced workers.
Of course, Supervalu President and CEO Mark Gross offered up the obligatory corporate-speak, “This decision was not taken lightly given the impact on our employees and the communities we serve, but we strongly believe this decision is in the best long-term financial and strategic interest of our business. Our leadership team and board of directors remain committed to taking proactive steps to transform our business and drive stockholder value.”
In 2016, Supervalu sold Save-A-Lot and its network of approximately 1,350 retail locations. In 2017 Supervalu acquired Unified Grocers and Associated Grocers of Florida.
The employees are not the only ones at risk.
Blackwells Capital is seeking to nominate six director candidates to the nine-member Supervalu Board of Directors, effectively taking over control of the company. As you may imagine, the present Board and executives are not pleased and have issued a statement.
“The Board and management team already have SUPERVALU’s transformation strategy well underway, and do not believe the changes to the Board proposed by Blackwells are necessary to ensure the continued execution of the Company’s initiatives to create stockholder value.
As previously disclosed, members of our Board and management team have had several discussions and meetings with representatives of Blackwells over the last several months to discuss overlapping objectives and attempt to reach a constructive path forward. Nonetheless, Blackwells has chosen to respond with a public campaign and an attempt to take effective control of the Company.
However, and as previously announced, we are committed to Board refreshment and will consider Blackwells’ candidates as we would any other potential directors to assess their ability to add value to the Board and the Company for the benefit of all stockholders.”
This appears to be another prime example where the employees are at risk from company boards and executives struggling to keep their position in the face of activist investors who only care about the financial returns and are divorced from any other considerations such as impacts on individuals and communities.