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MILWAUKEE — Roundy’s Inc. has begun to exit the Minneapolis/St. Paul market with an agreement to sell 18 Rainbow stores to a group of local grocery retailers, including Supervalu Inc., for $65 million in cash plus inventory.
Roundy’s Inc. has begun to exit the Minneapolis/St. Paul market with an agreement to sell 18 Rainbow stores to a group of local grocery retailers, including Supervalu Inc., for $65 million in cash plus inventory.
The transaction is expected to close during the third quarter. Roundy’s plans to use the proceeds to pay down debt.
Ten of the units will be converted to Supervalu’s Cub Foods banner. Two will become Byerly’s, a Lund Food Holdings Inc. brand.
Additional buyers are being sought for Roundy’s nine remaining Rainbow stores in the market. Those that cannot be sold are expected to close.
"The economic downturn over the last few years, coupled with an increased competitive footprint in the Minneapolis/St. Paul Market, has made it difficult for Roundy’s to keep the Rainbow banner competitive," chairman, president and chief executive officer Robert Mariano said this month. "However, we believe the sale of these Rainbow stores to this group of local operators will provide those stores better stewardship in serving their communities in the Minneapolis/St. Paul market going forward. The transaction will also allow us to better focus strategically on growing our Mariano’s banner in the Chicago market and strengthening our business in our core Wisconsin markets."
