M&S SELLS KINGS FOR $61.5 MILLION

MARK HAMSTRA

PARSIPPANY, N.J. - Kings Super Markets is finally off the selling block.

After several years of on-again, off-again deals, a group of private investors has agreed to buy the 26-store chain, based here, from its London-based parent, Marks & Spencer, for $61.5 million in cash.

That figure is considerably less than what previous bidders - including New York-based Red Apple Group and Larchmont, N.Y.-based D'Agostino's - were willing to pay just a few years ago. Bidding in 2002 reportedly exceeded $100 million, and Marks & Spencer reportedly sought as much as $200 million for the upscale banner.

"I think Marks & Spencer may be more motivated to sell, and the timing may have just worked out better this time," said Bruce Weitz, a longtime industry veteran who is the operating partner in the buyout.

The other investors are New York-based investment firms Angelo, Gordon & Co., which is the majority investor, and MTN Capital Partners.

"We think Kings is a great little chain with a great niche, and there's tremendous upside potential," Weitz told SN last week.

In the fiscal year that ended last April, M&S reported that Kings had operating profit of $7.9 million on sales of $405.9 million.

Weitz said he sees opportunities to build existing-store sales through merchandising initiatives, remodels and store expansions, and in the long term he hopes to expand into new markets through acquisitions of individual stores or small chains.

"I think Kings' market area can be enlarged," he said. The chain currently operates most of its stores in high-income suburban areas in northern New Jersey.

Weitz held executive positions at Elizabeth, N.J.-based Wakefern Food Corp., parent of Shop-Rite banner, and with Price Chopper Supermarkets, Schenectady, N.Y., before leaving the supermarket industry to join drug store chain Duane Reade.

"My passion has always been food," he said. "This is my core - this is where I started. I'm glad to be back in the supermarket business."

Richard Wolff, director of international business for M&S, said the company deliberately kept the latest sale effort quiet to avoid creating unease among workers.

M&S has been seeking to sell off its non-core businesses, which Wolff said include any banner without the Marks & Spencer name. Kings was the last of these divisions.