DALLAS -- Fleming here said last week it expected to complete its acquisition of Furrs Supermarkets, Albuquerque, N.M., by last Friday, Aug. 31.
Prior to closing the deal, Fleming rejected a handful of additional store locations, bringing the total of stores acquired to 36 while bringing the total of stores rejected to 30.
Most of the 30 stores that were not sold have been closing over the past several weeks, with the last group closing last Wednesday following storewide discount sales at three Albuquerque locations as a response to a request by Fleming to reduce inventory, Furrs officials said last week.
The 36 stores that Fleming will retain will be sold immediately upon completion of the transaction to their new owners, who are expected to close them briefly.
According to Fleming:
Kroger Co., Cincinnati, will buy seven of the stores -- in Albuquerque, Santa Fe, Los Alamos and Socorro, N.M. Ads in New Mexico newspapers last week said the stores would be closed Friday and would reopen today under the Smith's Food & Drug Centers banner.
Raley's Supermarkets, West Sacramento, Calif., will buy three locations -- in Albuquerque, Taos and Rio Rancho, N.M. Raley's said the stores were scheduled to close last Thursday, with Taos set to reopen last Saturday. Albuquerque is set to reopen tomorrow and Rio Rancho is scheduled to reopen Sept. 12, after the company closes an existing store in the same community.
Up to 10 stores will be retained by Fleming as corporate price-impact stores and will be reopened under the Rainbow Foods banner. Fleming also said it is acquiring four Smith's locations that will operate under the Rainbow banner.
The company declined to disclose the names of other buyers prior to completion of the transaction.
United Food and Commercial Workers Union Local 1564 said last week it has negotiated to retain union contracts at the seven Kroger stores and two of the Raley's locations. (The third, in Rio Rancho, is nonunion.)
Diane Virgil-Kimberle, president of the local, said union members hired by the new owners will maintain their current rates of pay, their health benefits and their contributions in the existing pension plans; in addition, both companies have agreed to grant vacations as previously earned, she said.
Furrs -- which operated 66 stores in New Mexico and west Texas, with sales of approximately $700 million -- filed for bankruptcy protection under Chapter 11 last February and opted to sell its stores to Fleming in a public auction last June.
Fleming agreed to pay $57 million for the chain, including all real estate, equipment leases, contracts and licenses, plus an additional $50 million for Furrs' inventory. The agreement also said Fleming had to retain a minimum of 40 stores -- a number that was subsequently lowered to 33.
