Pro's Ranch Sells Four Stores, Looks Southwest

ELLIOT ZWIEBACH

ONTARIO, Calif. — Pro's Ranch Markets has set its long-term sights on Texas, with particular attention to the Dallas and San Antonio marketplaces, Mike Provenzano, chairman and chief executive officer, told SN.

Pro's operates 12 stores in the West, though it has agreed to sell its four smallest stores in Southern California to Vallarta Supermarkets so it can concentrate on expansion in the Southwest. Of the eight stores that will remain, six are in Phoenix, one is in Albuquerque, N.M., and one is in El Paso, Texas.

“We sold the four California stores because we saw more opportunities elsewhere,” Provenzano said.

The company has four other locations under construction: two more in Phoenix, one more in El Paso and one in Las Cruces, N.M. “But our goal is to get into some of the larger cities in Texas, including Dallas and San Antonio,” Provenzano said.

“We've already looked around those cities — enough to know what's available for purchase or acquisition — but when we decide to expand to Dallas or San Antonio will depend on the economy and the illegal immigration issue. Right now we're just taking it one day at a time.”

While Provenzano declined to pinpoint his overall sales levels, industry estimates put the volume for the 12 Pro's stores at approximately $425 million. He told SN he expects to make up the lost volume at the four new stores he plans to open over the next year.

Of the stores being sold, three are 35,000 square feet, while the other is 25,000 square feet — all smaller than his newer stores, which encompass a range of 45,000 to 60,000 square feet.

Pro's caters to a Hispanic clientele. Earlier this year it was forced to let more than 300 employees at its Phoenix stores go because they were found to be working without proper work authorization documentation.

Pro's announced plans late last month to sell its four stores in California's Central Valley — two in Bakersfield and one each in Delano and Arvin — to Sylmar, Calif.-based Vallarta, which operates 29 stores in Southern California, including seven in the Central Valley. Industry observers estimate Vallarta's volume at $475 million.

John Marquis, chief financial officer for Vallarta, said both chains operate similar stores. Although the four stores being acquired are a little smaller than Vallarta's norm, “they fit nicely within our footprint,” he told SN.

The deal is expected to be finalized early next month, Marquis said, and Vallarta plans to close the four stores for a day before reopening under its own banner.

Provenzano said he put the stores up for bids and chose Vallarta as the buyer from among offers by several Hispanic operators for two reasons: “First, it was important that we sell to another member of Unified [Grocers, the Los Angeles-based member-owned cooperative] to keep the volume within the company. It was also important that the stores go to someone I can trust to take care of our employees.”

Provenzano said he expects there may be opportunities for his company to come back into California at some time, “but when we come back, we really want to focus on Los Angeles.”

Pro's has operated the four Central Valley stores for just over 10 years. Provenzano said he acquired the stores in Delano and Arvin from Safeway, one in Bakersfield from Lucky and the other Bakersfield store from an independent operator.

As he expands in Arizona, New Mexico and Texas, “all I see is Wal-Mart,” Provenzano said, “and from what I've seen in Phoenix and El Paso, Wal-Mart seems to be totally realigning its supercenters to look like the kind of stores we operate, with bakeries, hot foods and cremerias.”