RALEY'S PRESIDENT AND CEO RESIGNS UNEXPECTEDLY; COYNE SUCCEEDS

ELLIOT ZWIEBACH

SACRAMENTO, Calif. -- Raley's here said Michael J. Teel has resigned as president and chief executive officer of the chain "to pursue personal endeavors."

Succeeding him, with the title of president and chief operating officer, is William J. Coyne, who was named chief operating officer in February after nearly five years with the company.

Teel's resignation was unexpected, company officials said, "although knowing Michael, the unexpected is always what you should expect," one co-worker told SN. "That's just his personality -- he's not a person who does what you would expect him to do."

Teel could not be reached for comment.

In an interview with SN last week, Coyne declined to say if he had any prior indication Teel planned to resign. He said he was told by the company's board that he had been named president, "and I felt delighted and pleased."

Coyne, 45, joined Raley's in July 1997 as general counsel and subsequently held responsibilities in a variety of areas, including retail estate and site selection; management and organizational development; administrative compensation; and health and food safety.

In announcing his appointment, Joyce Raley Teel, the company's co-chair, said, "Bill has become our true champion, and I am confident he will lead Raley's into the ambitious future we have planned for our family of fine stores."

Raley's, a privately held company with annual sales of approximately $3 billion, operates 149 stores, including 110 stores in California, 30 in Nevada and nine in New Mexico.

The stores operate under four banners: Raley's, a superstore format with full drug centers (59 in California, 12 in northern Nevada, 18 in Las Vegas and nine in New Mexico); Bel Air Foods, a fresh format with some nonfood items (18 stores here); Nob Hill, a similar fresh format with a slightly broader variety of nonfood items (26 stores in the San Francisco Bay area); and Food Source, a warehouse format (seven stores in Northern California).

Teel, 50, is the grandson of Thomas P. Raley, the company's late founder, and son of its co-chairs, James and Joyce Teel. Michael Teel was named assistant to the president and COO in 1993, two years after his grandfather died; president in 1997; and CEO a year later, when Charles Collings retired.

Coyne told SN last week he does not anticipate any short-term changes in the company's direction. "We have a strong organization, with great people and great momentum, and my role is to keep that momentum going."

Asked how he plans to accomplish that, Coyne replied, "That's my job. But I'm only two days into it, so it's a little premature to try to articulate anything. I'm still in an assessing-and-planning mode, and change will occur when I'm ready to articulate what my plans are."

He said there are no immediate plans to name a new CEO. As to possible management changes, Coyne said, "Part of my role in my new position is to review our management team and see where it might be important to make any additions, but that's work still to be done."

Asked if the privately held company has any plans to go public, Coyne replied, "Unequivocally, no!"

Prior to joining Raley's five years ago, Coyne was an attorney with Diepenbrock Wulff Plant & Hannegan here. But he had majored in finance and economics as an undergraduate, he told SN, "and I always wanted to be more strategically involved in the business world."

So when Raley's offered him the opportunity to move into a corporate environment, he jumped at the chance "because that's what I was seeking to do," he said.

During his oversight of the company's real estate operations, Raley's expanded out of its traditional Northern California-northern Nevada base in 1999 to acquire 18 stores in Las Vegas and seven in New Mexico from Albertson's, Boise, Idaho. After closing two New Mexico stores last year, the chain acquired four more, from Furr's Supermarkets, Albuquerque, earlier this year.

Coyne said last week the New Mexico and Las Vegas stores are doing well. "It's been a building process to introduce our banner into those marketing areas," he acknowledged, "but we've been able to establish ourselves in those communities, and the people there now feel towards Raley's like the people in California do."

Coyne said Raley's has six new stores under construction. He added that it also owns land to accommodate at least two other California stores.