Supervalu Strengthens Team - Analyst Blog
March 26 2013 - 12:19PM
Zacks
Supervalu Inc. (SVU) has made additional
appointments to its new executive team following the completion of
the strategic sellout of its markets to Cerberus Capital Management
LP.
Under the leadership of former OfficeMax Inc.
(OMX) Chief Executive Officer Sam Duncan, who became Supervalu's
CEO in Feb 2013, the company made many changes to its management
team.
The executive team now includes two new entrants, Randy Burdick as
executive vice president and chief information officer, and Michele
Murphy as executive vice president, human resources and corporate
communications.
Randy Burdick, who replaces Kathy Persian, has 28 years of
experience at in leadership positions at several companies like
Hewlett-Packard Company (HPQ) and Advanced
Micro Devices Inc. (AMD). Prior to joining Supervalu,
Burdick had served OfficeMax for eight years as chief information
officer.
Michele Murphy, who replaces Dave Pylipow, has 30 years of
experience. She had served Supervalu as senior vice president of
corporate human resources and labor relations for the last seven
years.
J. Andrew Herring is expected to leave the company following the
completion of the deal on Mar 25, 2013. Herring held the position
of executive vice president of real estate, market development and
legal in Supervalu since 2010.
As a part of broad-based strategic alternatives, Supervalu will
sell Albertson's, Jewel-Osco, Acme, Shaw's and Star Market chains,
all of which combined come to about 877 stores. These go to private
equity firm Cerberus Capital Management LP, for $3.3 billion.
Management commented that it wants to streamline its operations in
order to focus on Save-A-Lot discount stores, as well as its
smaller regional chains Cub, Farm Fresh, Shoppers, Shop 'n Save and
Hornbacher's.
Very recently, Supervalu reshuffled its management team. Michael
Moore, the present chief marketing officer, was replaced by Mark
Van Buskirk, from Supervalu’s rival grocery chain The Kroger
Company. He will take up the responsibility of executive vice
president of merchandising and marketing in the company.
Supervalu missed estimates in the third quarter of fiscal 2013 and
also posted lower earnings from the year-ago quarter. Moreover, the
company reported negative identical store sales successively for
the past four years. The trend has continued in the first half of
fiscal 2013.
Now, in order to combat four successive years of negative identical
store sales and re-position the company for growth, Supervalu is
geared for expansion of its private brand portfolio and to step up
cost-reduction initiatives.
These are expected to reduce administrative and operational expense
by an additional $250 million by fiscal 2014.
We believe that the executive management turnaround could prove
beneficial to Supervalu’s bottom line as all the new appointees
have extensive retail and grocery experience.
Currently, Supervalu carries a Zacks Rank #3 (Hold).
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