LOS ANGELES -- Smart & Final here said last week it plans to focus solely on operating its 228 non-membership warehouse stores after signing a definitive agreement to sell its Northern California food-service operations to Sysco Corp., Houston, for an undisclosed amount.
In June, the company agreed to sell Henry Lee Co., its Miami-based food-service business, along with 14 stores in Florida to Gordon Food Service, Grand Rapids, Mich. Both transactions are expected to close next month.
The Northern California operation, called Smart & Final Foodservice Distributors and based in Stockton, was formerly called Port Stockton Food Distributors.
According to Ross Roeder, chairman and chief executive officer, "Sysco's purchase of our Stockton-based food-service direct-delivery assets is the best avenue of continuity for our direct-delivery customers and our sales force.
"Coupled with the divestiture of our Florida operations, this transaction further concentrates our focus on our core store operations in the Western U.S., where we have successfully operated stores for more than 130 years," Roeder said. "This is where our expertise lies, and this is where we see our best growth opportunities.
"Through the divestiture of our food-service operations, we will have additional resources to strengthen our balance sheet and to focus on the continued development of our store formats."
Smart & Final operates 228 stores in California, Oregon, Washington, Arizona, Nevada, Idaho and northern Mexico, including 44 stores in Northern California and the Pacific Northwest that operate under the Cash & Carry banner.
The company branched out into food service 13 years ago, acquiring Port Stockton in 1990 and Henry Lee in 1995.
"But neither company really met our performance requirements," a company spokesman told SN last week, "and like a lot of companies in the current environment, we are looking for ways to focus our resources to get the biggest bang for the buck, and we believe that for us, that means operating stores in the West."
Food-service sales, encompassing the Northern California and Florida operations, accounted for about $38 billion in 2002, or 19% of the company's total sales of $2.02 billion.
