retail news in context, analysis with attitude

The Wall Street Journal reports this morning that Albertsons is planning an initial public offering that would value the company at $19 billion.

If the plan goes through, it would be the latest attempt by private equity group Cerberus Capital Management, which owns Albertsons, to cash out. In 2018, Albertsons announced a planned merger with drugstore chain Rite Aid, which would've provided a path to going public. But investor pushback scuttled that plan, and Albertsons instead focused on achieving greater efficiencies and effectiveness.

The Journal writes that Albertsons "has substantially reduced debt since it last filed paperwork for an IPO in 2015. It ended November with about $8.34 billion in net debt excluding operating leases, down from $10.52 billion a year earlier.

"The Boise, Idaho-based company posted a 2.7% increase in same-store sales when it reported third-quarter earnings last week. The operator of 2,260 stores has been remodeling its locations, investing in technology and selling real estate, outpacing its bigger rival Kroger Co. in growth. The improvements have come under chief executive Vivek Sankaran, who joined from PepsiCo Inc. last year."
KC's View:
This one will work, I predict. This isn't to say that Albertsons does not have a lot of work still to do. It does. And when the economy starts to recede, as it inevitably will, things will get even tougher. But this is a company that has made a lot of progress in the past few years, with numbers and attitudes that look better all the time.