The Minneapolis Star Tribune reports that while Fleming’s Rainbow Foods division remains on the market to be sold, its sinking performance in a tough environment means that bankrupt Fleming is unlikely to get anything near the $37 million to $400 million it was hoping to generate back in 2000 when it came close to selling the 43-store chain to Albertsons.
These days, according to industry observers, the price is likely to be less than half that -- $160 million or less, and will only then be achieved if the company is broken up and sold piecemeal, which also is seen as a likely scenario.
That’s not good news for Fleming, which currently is operating under bankruptcy protection.
“In the Twin Cities,” the paper reports, “Rainbow's revenue has slid from $1.2 billion in 1998 to an estimated $900 million in 2002. Profits are down sharply as well, as the company found itself squeezed between Byerly's and Lunds at the upper end of the market and Cub Foods and a host of new entrants at the low end.”
Once a dominant retailing force, Rainbow now is but a shadow of its former self.
Probable bidders for all or part of the company are believed to be Roundy’s, the Wisconsin-based retailer/wholesaler, which also is thought to be a likely bidder for Safeway’s Dominick’s division in Chicago; Nash Finch, if it can get out from underneath the pressure of an investigation into its accounting practices by the US Securities and Exchange Commission (SEC); and Cub Foods franchisees, who could convert selected Rainbow stores to the Cub banner.
These days, according to industry observers, the price is likely to be less than half that -- $160 million or less, and will only then be achieved if the company is broken up and sold piecemeal, which also is seen as a likely scenario.
That’s not good news for Fleming, which currently is operating under bankruptcy protection.
“In the Twin Cities,” the paper reports, “Rainbow's revenue has slid from $1.2 billion in 1998 to an estimated $900 million in 2002. Profits are down sharply as well, as the company found itself squeezed between Byerly's and Lunds at the upper end of the market and Cub Foods and a host of new entrants at the low end.”
Once a dominant retailing force, Rainbow now is but a shadow of its former self.
Probable bidders for all or part of the company are believed to be Roundy’s, the Wisconsin-based retailer/wholesaler, which also is thought to be a likely bidder for Safeway’s Dominick’s division in Chicago; Nash Finch, if it can get out from underneath the pressure of an investigation into its accounting practices by the US Securities and Exchange Commission (SEC); and Cub Foods franchisees, who could convert selected Rainbow stores to the Cub banner.
- KC's View:
