PLEASANTON, Calif. — Safeway said Thursday it plans to dispose of its 72 Dominick's stores in Chicago and exit the market early in 2014.
"The decision to sell Canada Safeway and to exit the Chicago market is consistent with Safeway's priority of maximizing shareholder value," Robert Edwards, president and chief executive officer, said. "These actions will allow us to focus on improving and strengthening our core grocery business.
"We are continuing to review all of our businesses to optimize our allocation of resources, improve sales and grow operating profits."
The company said Dominick's incurred a net loss of $8.4 million for the third quarter, compared with a loss of $6.2 million a year ago; and a loss of $21.5 million for the year to date, compared with $16.8 million for the 36-week period a year ago. For the fiscal year ended Dec. 29, 2012 Dominick's had a net loss of $31.5 million.
The sale of Safeway's Canadian assets to Empire Co., corporate parent of Sobeys, which was announced in June, is expected to close during the fourth quarter.
Safeway said the exit from Chicago will result in a cash-tax benefit of between $400 million and $450 million that it will use in the short term to offset cash tax expenses from the sale of its Canadian assets. Any other cash proceeds will be used to buy back stock and invest in growth opportunities, the company said.
Because the decision to exit the Chicago market was reached after the end of its third quarter on Sept. 7, Safeway said Dominick's will not be accounted for as a discontinued operation until the fourth quarter.
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