Let's realize that investment bankers bought Safeway. Safeway got sold because the former owners could not get as much profit out of it as the shareholders were promised by the investment bankers. Cerberus (name refers to the dogs that are the hounds of hell). Look up the Google images for "Cerberus": Does that give you confidence that more baggers, delivery service for the housebound elderly, and a better store are what is ahead? Take a quick look at the investment banker's way to make piles of money for shareholders: It is described in the experience of Mervyn's. It's a pretty straightforward procedure. 1.) Buy a company (Safeway), Make it look more profitable in a big hurry (i.e. disbanding the shrink program and telling stores to stock the shelves with as much product as possible, it doesn't matter if you have to throw half of it away due to spoils) and for the short run by cutting costs (see: massive layoffs), selling assets (i.e. the significant properties Safeway owns), reducing services, and other "Economies". 2.) This than makes all the ratios banks use to give loans much more favorable, even though the new financial plan is not sustainable for a long term business. 3.) But with the new rations, a huge refinance gets made with the banks, thus saddling Safeway with massive debt and yielding obscenely big "fees" (paid out of the capital that is lent) for Cerberus investment bankers and the shareholders. 4.) Adding this massive load of debt to an already crippled grocery business, Safeway then declares bankruptcy, where Cerberus then sells it at fire-sale prices, once again yielding big profits for themselves. Did you expect the hounds of hell to care about Pleasanton's grocery needs or your local store needs? They are interested in profits, indeed they have a fiduciary legal responsibility to make the most profitable arrangements for their shareholders. The rest of us will just have to get over it--get over the loss of grocery store, loss of jobs, disruption as the properties are all sold off and everything settles into something totally different. No one is safe...you think at the store your precious job is untouchable. Think again and start preparing yourself for another industry.
6 replies (most recent on top)
Well, 67141, has your worst fears come true yet? The Pleasanton HQ is still there, with those layoffs probably still to happen even if Albertsons LLC didn't buy the company, same with the doomed 9 Colorado stores, the Texas stores are still there and continuing to grow with an upcoming new Tom Thumb near downtown Dallas and new United stores, and some 70 stores are being re-opened as Acme after the demise of the A&P family.
Still glad they cut all the pleasanton backstage people
They were doing nothing but strangling the customers and us trying to operate stores.
So truly spoken. I'm surprised that all of the layoffs are happening so quietly and without any notice of the press. It's disgusting.
Let's see if mr fun ride can report back in two years. Need to know whether promotions and raises were provided to the Cerberus faithful
You must be the same fearmongerer back on that Pleasanton page that I tried to explain with. Based on your rhetoric, I'm guessing you know that you're trying to foster fear rather than share your own. So let's break things down.
1) There will be layoffs. There's only going to be ONE Southern California division, and despite the Pleasanton headquarters staying there as a regional office, there are going to be layoffs at SoCal as they merge Albertsons SoCal and Vons.
2) The Cerberus name was regretted. Are you going to be hung up on the name?
3) In both the Albertsons and Mervyns deals, there were a group of investors buying each one. The group buying Mervyns and Safeway are different.
4) AB Acquisition LLC, the investor-controlled entity that controlled Albertsons LLC and now Safeway Inc., had the opportunity to kill off Albertsons like you described. The Northern California division and Florida division were killed under their control, except not even that because they still own (and OPERATE) stores in Florida. But you know what? They were probably doomed anyway, because the reason Albertsons Inc. got in trouble in the first place was because over-expansion and buying a company (American Stores Inc.) it couldn't truly afford. Instead, what ended up happening, is that they bought back the rest of the company from SuperValu, and started putting things back together. They returned control to the divisions, lowered prices, and ended a reign of incompetence by SuperValu.
5) Safeway Inc. was on a crash course to oblivion. Their ill-fated choice to control buying from the Pleasanton headquarters wiped out a number of stores. Genuardi's in 2012. Dominick's in 2013. Randalls would've been next. And you talk about layoffs. There are still vacant stores in both chains.
6) I believe that one of the main reasons AB Acquisition LLC bought Safeway was for their selection of private brands, which Albertsons lost (such as Wild Harvest) to SuperValu when the company broke up in 2006.
The goal of companies to make money. Unlike Sears and Kmart, which were both dinosaurs when the merged a decade ago, these are both strong companies that can excel and make a grocery company like no other. Whether it's the Jewel-Osco in downtown Chicago or United Supermarkets in a desolate north Texas town, AB Acquisition (which will probably change names later this year) will run a national supermarket chain. Get ready: it will be a fun ride.
My precious job is not untouchable