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The Milwaukee Journal-Sentinel reports on an interview with Roundy’s CEO Bob Mariano, who says that “it's fair to say that in a reasonable time there's going to be a change in the (company’s) capital structure; in the next year to 18 months. All possibilities are on the table.”

The change is keyed to the company’s current ownership by a Chicago investment firm, Willis Stein and Partners, which typically holds onto companies for about five years. Willis Stein bought Roundy’s in 2002, which means 2007 would be the year for some sort of divestment.

Mariano tells the paper that once the decision is made to sell Roundy’s, “the owners will hire advisers and go through the usual steps, considering such options as an outright sale to a competitor or another private investor, or a public stock offering.”

The Journal-Sentinel writes that if and when Willis Stein decides to sell Roundy’s, it will be a vastly different company than it bought. “Since 2002, the owners have taken Roundy's on an acquisition path that has changed the company from a wholesaler to a retailer. The addition of retail has made Roundy's the fastest-growing retailer in the world, according to the latest annual global report from Deloitte. The report, published in January by Stores magazine, ranks the 250 largest retailers in the world, and also lists the 50 fastest growers, based on a five-year compounded annual growth rate. On that basis, Roundy's came in No. 1 in growth, with retail sales of $3 billion in 2004 and a five-year compounded rate of 56.7%. The wholesale business brought total revenue to $4.8 billion in 2004. In size, Roundy's retail business ranks 202 on the list.”

Even as the company prepares for some sort of change in ownership, Mariano says, it will continue to build new stores and acquire locations that make sense – including independently owned Pick 'n Save stores that may come available, and any Jewel-Osco stores that may go on the market once Supervalu completes that acquisition.

Analysts tell the Journal-Sentinel that one other tantalizing possibility remains in play – that Mariano might want to make a move on Dominick’s in Chicago if Safeway decided to make it available at the right price. Mariano, of course, used to run Dominick’s.
KC's View:
Looking at the food retailing industry today, you get the sense of pieces being moved around the chess board as companies try to position themselves for even greater levels of competition that are just down the road a piece.

For many of them, it will be what the great Bob Murphy used to call “nine miles of bad road.”