Spartan to Buy Felpausch Food Centers

GRAND RAPIDS, Mich. -- Spartan Stores here yesterday said it agreed to acquire the Felpausch Food Centers chain, one of its largest wholesale customers, for an undisclosed amount of cash. "We came to the conclusion that it was a fair deal for us and for the ESOP owners at Felpausch," Craig Sturken, chairman, president and chief executive officer, Spartan, told SN last night at the Western Michigan University Food Marketing Conference in Kalamazoo, Mich. He said Spartan is evaluating whether or not to retain the Felpausch name on the stores, which operate primarily in small towns east and south of Spartan's company-owned store network. The purchase includes all 20 supermarkets operated by Hastings, Mich.-based G&R Felpausch Co., mostly under the Felpausch Food Center banner, along with two fuel centers and three Xpressmart convenience stores. The purchase does not include Felpausch's Save-A-Lot locations and its distribution center. Spartan said the acquisition would increase its retail sales by about $200 million and add $100 million to its top line, and that first-year synergies from the acquisition would be more than offset by expenses of $5 million-$6 million for marketing, training and other associated costs. Chairman and CEO Mark Feldpausch will not remain with the company, which was founded in 1933. Also, commenting on reports that Spartan might have an interest in acquiring some of the Farmer Jack stores in Detroit that are said to be for sale, Sturken told SN the company was not interested in operating the stores but could help its wholesale customers in the area purchase some locations. "As well as we know that trade area, that's not in our sweet spot right now [for operating corporate stores]," he said. -- Mark Hamstra