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Albertsons returns to the stock exchange, ends first day down. What the CEO says is next

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Idaho Business pres. by My 102.7

For the first time in 14 years, you can now buy stock in Boise-based grocery giant Albertsons Companies.

The company began trading on the New York Stock Exchange Friday morning, priced at $16 per share. Company CEO Vivek Sankaran appeared during the ringing of the NYSE opening bell, pumping his fists in the air as the bell rang, officially bringing the stock to the public exchange. Sankaran appeared on a video screen on the Wall Street stock exchange, piped in remotely from Albertsons’ Boise HQ.

Later, he appeared on CNBC.

“It’s so hard to predict what’s happening in the market anymore,” he said on CNBC. “We are just proud that in this extremely difficult environment, during a pandemic, we were able to IPO the company. I think it was a great accomplishment for us. We are looking at the long term. It’s our customers that matter.”

Albertsons priced the IPO at $16, below an earlier estimate of $18 to $20 per share.

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After opening at $16, the stock perked up above the price, but later fell off. It ended the day underwater at $15.45, down 55 cents.

‘Stores still matter’

Sankaran said the company continues to bet on a combination of delivery and pickup services as well as stores.

“Stores still matter. A lot of companies shop stores and use the delivery, and it’s that combination that makes it really powerful, and we’re betting on that,” he said.

The latest incarnation of Albertsons came about by a long series of acquisitions. A coalition of investors led by Cerberus Capital bought so-called underperforming stores from the original Albertsons Inc. in 2006. That formed the basis of Albertsons Companies, which started with 660 stores. The better-performing locations, including those in the Boise market, went to Minneapolis-based Supervalu. In 2013, with Supervalu on the ropes, Albertsons bought them, reuniting the company. Two years later, it bought Safeway, vaulting it to the nation’s second-largest grocer behind Kroger, which owns Fred Meyer.

Along the way it also bought United Supermarkets, Haggen, Plated,

The CEO said Albertsons could look to more acquisitions in the future, but for now hopes to operate the stores it has.

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“We built this company through acquisition,” Sankaran said. “Right now we are focused on creating more value through the assets we have. We have great assets and plenty of headroom there. But we are always eyes open. When the right opportunities come by, we can do it, but it’s not a primary task of our growth agenda and value creation.”

The IPO comes just shy of Albertsons’ 81st birthday.

Albertsons timeline

1915 –  Skaggs Cash Store in American Falls, Idaho by MB Skaggs.

1926 – Skaggs, Safeway merge – combined company  takes Safeway name.

1939 – Albertsons founded in Boise by Joe Albertson, a former Safeway manager – in partnership with LS Skaggs, MB’s brother.

1969 – Albertsons & Skaggs Drug Centers (started by LS Skaggs) form joint venture for grocery/drug store concept.

1977 –  Albertsons & Skaggs Drug Centers part ways amicably.

1978 – Skaggs & American Stores merge, taking the American Stores name.

1993 – Company founder Joe Albertson dies at age 86.

1999 – Albertsons buys American Stores, and briefly becomes nation’s largest grocer.

2001 – Larry Johnston hired as Albertsons CEO after career at GE. Immediately cuts staff by 20%, closes hundreds of stores and pulls out of markets like Houston & New Orleans.

2006 – After Johnston’s efforts fail, a diminished Albertsons is split in three pieces and sold off: Standalone drug stores went to CVS, most grocery stores sold to Supervalu, and a small group of so-called “underperforming” stores sold to Cerberus Capital Mgmt.

2013 – After sputtering, Supervalu sells most of its stores to the Cerberus group. It formally reestablishes its headquarters in Boise.

2013 – Albertsons buys Lubbock, TX grocer United Supermarkets, adding 50 stores.

2015 – Newly reunited Albertsons chain completes purchase of the larger Safeway – making it the nation’s second-largest grocer.

2015 – Albertsons attempts its first IPO. It later pulls back after Walmart and other retailers begin to struggle on the market.

2018 – Albertsons announces it will merge with pharmacy retailer Rite Aid. The deal falls apart amid questions from shareholders of Rite Aid.

2020 – Albertsons successfully completes an initial public offering, priced at $16 per share.

Don Day
Don is the founder and editor of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow.

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