OKLAHOMA CITY — Homeland Stores here has been sold to its employees by Associated Wholesale Grocers, the Kansas City, Kan.-based wholesaler that has owned the retail chain since 2002.
The sale encompasses 76 stores, including 47 Homelands in Oklahoma and one in Kansas; 21 United Supermarkets in Oklahoma; three Country Marts in Oklahoma; and four Super Save Markets in north-central Texas, which combine for estimated sales of $532 million.
A spokesman told SN the company will take on new debt to finance the sale.
In a separate interview with SN, Philip Payment, Homeland’s vice president, marketing and merchandising, said the sale has been contemplated for several years. “It’s a result of years of planning and months of negotiations,” he said. “Today’s financial environment dictated the timing.”
The sale was accomplished through an employee stock ownership plan. “Many independents have entered into ESOPs so employees can share in the long-term benefits of ownership,” Payment explained.
He said he expects the chain’s volume to increase under the ESOP. “As co-owners, we expect employees will step up their service to customers over time, and increased customer satisfaction will mean increased sales.”
Homeland anticipates expanding its store base, he added. “We are looking for acquisitions, and our expansion plans will be methodical, based on market opportunities.”
Darryl Fitzgerald, who has been in charge of the Homeland division of AWG, will continue as president and chief executive officer of the chain. He said AWG has been “a very progressive owner, investing in remodeling and updating locations.
“They furnished us with the resources to help our company recover [from a 2001 bankruptcy] and then begin to grow. The turnaround of these stores has been the direct result of our hardworking, dedicated employees, [and] it is gratifying to see those efforts rewarded with ownership.
“Employee ownership ensures everyone’s mutual interest is absolutely aligned in the business. In that regard, we are all focused on providing the best service possible to our customers.”
Homeland has more than 4,000 employees, all of whom will be part of the ESOP, the company said, with employees credited with shares of company stock annually, based on their total time with the company, including years prior to the sale. Those shares will become vested, with the value of the stock earned being paid to employees at a later date, the company pointed out.
According to Jerry Garland, AWG president and CEO, “Since the acquisition of a number of these stores brought them out of bankruptcy in 2002, this management and employee team has completed a turnaround and is now on solid footing to build a more competitive organization.
“AWG is pleased to be selling 100% of the company to its employees, which will allow them to enjoy the fruits of their efforts as owners of their own business.”
Homeland said it will continue to buy from AWG. Stores will also continue to operate with a conventional format, with the Homelands using the slogan, “A Fresh Experience,” and United using the tagline, “Home of the Personal Touch.”