INVESTMENT FIRM BUYS CONTROL OF FURR'S

LISA A. TIBBITTS

ALBUQUERQUE, N.M. -- Windward Capital Partners, a privately-owned investment firm in New York, has acquired a majority interest in Furr's Supermarkets here.

Windward acquired the stake in Furr's from a German investor the chain declined to identify.

Furr's said the deal will provide it with the capital to fund its future growth plans -- which include rolling out a new superstore format that premiered last summer.

"Our capital spending over the next five years is somewhere around $100 million -- which will virtually remodel the majority of our stores in a very quick fashion and accelerate the growth of our new stores within our trading area," said Buz Doyle, president and chief operating officer of Furr's.

"We have two [stores] under construction now: one in Albuquerque and another in El Paso, Texas. In the next 60 days, we'll have 12 stores under remodel. Next year, we'll build four new stores and remodel another 10 or 12," he said.

Officials from Windward could not be reached for comment.

Talks with Windward began about six months ago, Doyle said. Windward is backed by at least two major financial institutions -- Metropolitan Life Insurance Co., New York; and CS Holding, Zurich, Switzerland, through its subsidiaries CS First Boston and Credit Suisse.

Windward's combined assets total more than $400 billion, according to Furr's. The chain said its annual sales are more than $1 billion. Furr's operates 74 stores throughout New Mexico and western Texas.

Although Doyle would not disclose the terms of the deal with Windward or the investment firm's exact stake, he told SN, "Our German investor was interested in selling their share so that they can reinvest in Germany. The Windward group will hold the majority of shares and will have several seats on the board. They will be involved in management as any shareholder will."

Fleming Cos., Oklahoma City, is also a Furr's shareholder and board member. The company said that Fleming will continue to contribute to Furr's expansion plans but Doyle declined to elaborate.

As reported, Furr's has been seeking a new source of revenue for some time. In April, the company asked the Federal Trade Commission to release it from restrictions preventing it from engaging in a lease-back transaction involving 57 stores.

The agreement with Windward appears to have injected the necessary funding, said one observer. Furr's goals, he said, were to end foreign involvement and increase the stake held by senior executives.

As Furr's formulated its future growth strategies in the wake of the deal with Windward, the company also opened another superstore in Albuquerque last week. The 55,000-square-foot store has 14 departments.

"We feel like we've got a state-of-the-art offering, including food courts, club stores-within-the-store, pharmacy, bakery, deli [and] video. We're greatly expanding our produce department and our meat department offering to include more restaurant-quality foods," Doyle explained.