Delhaize Group said yesterday that it is selling its 66-store Bottom Dollar chain in Pennsylvania to Aldi Inc. for $15 million.
The value-driven chain was launched in October 2010. According to the announcement, "The transaction is expected to result in an asset impairment and other charges for Delhaize Group of approximately $180 million."
The stores are expected to stay open under the Bottom Dollar banner through the end of the year, and then will be closed and converted to the Aldi brand.
Frans Muller, president/CEO of Delhaize, released a statement that said, in part, that "the divestiture of Bottom Dollar Food further simplifies our business, increases debt capacity and creates shareholder value. Today's announcement is consistent with our strategy, announced in March, of investing in and focusing on our core markets."
Delhaize sold off its Sweetbay, Harveys and Reid's supermarket chains 18 months ago for $265 million. And it was just a week ago that the company announced that Beth Newlands Campbell, president of its Food Lion chain, was leaving the company, to be replaced by Meg Ham, who had been serving as president of Bottom Dollar.
The announcement came as Delhaize announced that its US third quarter comparable store sales were up 5.3 percent because of what Delhaize Group CEO Franz Muller called "both continued good momentum at Food Lion and favourable, albeit temporary, competitive dynamics at Hannaford" (by which he meant the late summer implosion at Market Basket).
The value-driven chain was launched in October 2010. According to the announcement, "The transaction is expected to result in an asset impairment and other charges for Delhaize Group of approximately $180 million."
The stores are expected to stay open under the Bottom Dollar banner through the end of the year, and then will be closed and converted to the Aldi brand.
Frans Muller, president/CEO of Delhaize, released a statement that said, in part, that "the divestiture of Bottom Dollar Food further simplifies our business, increases debt capacity and creates shareholder value. Today's announcement is consistent with our strategy, announced in March, of investing in and focusing on our core markets."
Delhaize sold off its Sweetbay, Harveys and Reid's supermarket chains 18 months ago for $265 million. And it was just a week ago that the company announced that Beth Newlands Campbell, president of its Food Lion chain, was leaving the company, to be replaced by Meg Ham, who had been serving as president of Bottom Dollar.
The announcement came as Delhaize announced that its US third quarter comparable store sales were up 5.3 percent because of what Delhaize Group CEO Franz Muller called "both continued good momentum at Food Lion and favourable, albeit temporary, competitive dynamics at Hannaford" (by which he meant the late summer implosion at Market Basket).
- KC's View:
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I have to be honest here - apparently I've gotten Delhaize all wrong. It always seemed to me, as it was opening formats like Bottom Dollar and Bloom, that it made sense for them to try and capture different segments of the marketplace as a way of fending off a variety of competitors. When they closed down Bloom, I figured that they'd keep Bottom Dollar because it would allow them to compete more effectively with the discount stores with which Food Lion - which was built on a low prices promise - no longer was effectively competing.
Oh, well. What do I know?
One thing that seems clear is that Delhaize is cutting out anything that doesn't seem "core." But there remain people within the organization who are wondering with a sense of vague disquiet how deep the cuts will go.
