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BYERLY'S EXIT: DOMINICK'S, LUNDS DEAL FOR ALL STORES

MINNEAPOLIS -- Byerly's, which has made upscale marketing an art for the past 29 years will be sold.Last week the company agreed to sell its 11 Minnesota stores to another upscale niche player -- crosstown rival Lund Food Holdings, parent company of Lunds Food Stores here.The price of the sale was not disclosed. Closing is expected on or about April 30.In a separate transaction last week, Byerly's

MINNEAPOLIS -- Byerly's, which has made upscale marketing an art for the past 29 years will be sold.

Last week the company agreed to sell its 11 Minnesota stores to another upscale niche player -- crosstown rival Lund Food Holdings, parent company of Lunds Food Stores here.

The price of the sale was not disclosed. Closing is expected on or about April 30.

In a separate transaction last week, Byerly's sold the two Chicago-area stores it opened last spring to Dominick's Finer Foods, Northlake, Ill. (For details on Dominick's plans, see story on Page 4.)

Both transactions had been anticipated by trade observers for several weeks.

Jack Morrison, Byerly's chairman, denied trade reports that the two Chicago stores -- one in Highland Park, Ill., that opened in mid-April and another in Schaumburg that opened in late May -- have had disappointing results. "Those stores had a successful entry, and we were going ahead with plans to open additional stores in Oak Brook, Naperville and other locations," he told SN last week.

The two stores were sold separately, he said, "because the Lund family didn't want to pursue a Chicago strategy."

The price on the Chicago stores was also not disclosed; the sale closed last Thursday.

While Dominick's will convert the two Chicago Byerly's to its Fresh format, Lunds will retain the Byerly's name on the 11 stores it is acquiring "because we know there are Lunds shoppers and Byerly's shoppers, and they have come to know and depend on their favorite stores, products and personnel," Russell T. (Tres) Lund 3rd, Lunds president, told SN last week.

"Both of us are deeply committed to quality, unmatched variety and unparalleled service," he added.

All eight Lunds stores and 10 of the 11 Byerly's operate in the Twin Cities area, with a single Byerly's located north of here in Saint Cloud, Minn.

Lunds, a family-owned business, has an eight-store volume estimated at $90 million, while the 13 Byerly's stores (including the two Chicago-area stores) have an annual volume of $350 million. The combination, excluding the Chicago stores, would give Lunds a volume of approximately $387 million, industry observers noted.

Byerly's, founded in 1968 by Don Byerly, sold majority control of the company in 1990 to an investment group headed by Goldner Hawn Johnson & Morrison here and Chase Venture Partners, New York.

According to Morrison, the decision to sell Byerly's was made "two or three months ago," prompted by the desire of the two groups to liquify their investment.

Byerly's Minnesota stores range in size from 50,000 to 90,000 square feet, while the Lunds stores range from 25,000 to 41,000 square feet.

Estimating the closest distance between any two locations at about 3 miles, Lund said there are no plans to close any units. "There is not enough overlap to compel us to close any stores," Lund said.

Where there is some overlap, he added, "the stores are in such densely populated areas that if we were to close one store because it was too close to another, we would see our business fractured and we would not pick up any additional business."

According to Lund, there are some differences in layout between the two operations. "For example, Byerly's has frozens in the center of the store while ours are on the perimeter," he said.

"But we have been evolving in the same direction, and our focus going forward will be taking the best attributes of each and having an influence on each company in ways that will be transparent to customers.

"But we intend to address those integration issues in an evolutionary manner, and we will direct our decisions to our employees first and the media second."

Lund said integration issues, including how much autonomy Byerly's store managers will continue to have and what will happen to the Byerly's executive staff, will be determined by the closing date of the acquisition.