SUPERVALU Closes Stores, Continues Surrender

By Douglas A. McIntyre Updated Sep 6, 6:44AM EDT · Published Sep 5, 5:08PM EDT

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SUPERVALU Inc. (NYSE: SVU), nearly beaten to death over the last several months by Wall St., will close roughly 60 stores and take a charge as high as $90 million. The company may add $10 million in revenue from sales of store assets. SUPERVALU said it will shutter

underperforming or non-strategic stores this fiscal year including 38 in its retail food reporting segment and 22 Save-A-Lot locations. The majority of the stores are expected to close before December 1, 2012, the end of the Company’s fiscal 2013 third quarter

The firm added:

Over the next three years, the Company estimates that closing these locations will generate between $80- $90 million in cash from monetizing owned real estate, eliminating cash operating losses, and selling departmental assets. The Company owns the real estate for approximately one-third of the retail food stores being closed. Cash generated from these actions will be used to reduce outstanding debt and for other general corporate purposes. These closures will also be accretive to net earnings.

SUPERVALU’s stock currently trades at $2.24, down from a 52-week high of $8.75. When the company announced poor quarterly earnings in July, it suspended its dividend and said its board would consider strategic options. Nothing has come from those actions, and investors have become desperate about the firm’s prospects.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.