22,000 STAFFERS EXIT AMERICAN STORES

MICHAEL HARRISON

SALT LAKE CITY -- When American Stores Co. here closes its merger with Albertson's, Boise, Idaho, 18% of its 121,000 work force will not be making the trip north, the company said.

In a recent conference call with analysts to discuss its results for the fourth quarter and fiscal year ended Jan. 30, American said nearly 22,000 corporate staffers have already left the company in anticipation of the merger. The combined company is to be headquartered in Boise.

Albertson's has already begun hiring staffers such as engineers and architects to keep its aggressive building agenda on track. The company said it plans to open 750 new combination supermarket/pharmacies, 600 fueling stations and remodel an additional 1,000-plus stores over the next five years.

The hiring is "across the board," including attorneys and secretaries, according to Michael Read, a spokesman for Albertson's. "We'll get a lot of those people from American Stores, but obviously there will be a need for some additional folks."

Read told SN the company is planning to hire "a few hundred people over several years for our naturally projected growth."

Both companies said they expect the deal -- which is pending approval from state and federal regulators -- to close sometime between this first quarter, which ends in April, and the latter part of the second quarter.

Analysts told SN that Dan Zvonek, a spokesman for American, dispelled a rumor -- brought up during the conference call -- that the majority of the employees who left the company were involved in real-estate projects. "They flat out said that's not true," one analyst, who requested anonymity, told SN.

"They said is was mostly project-related people and that they are continuing the process of rolling out real-estate projects," the analyst added.

Another analyst who participated in the call, Debra Levin, Morgan Stanley Dean Witter, New York, told SN "[American Stores] said there had been an 18% 'head-count attrition' and that it was in-line with management's expectation. I suspect the employees were making decisions on their own personal needs," meaning they declined a relocation to Boise.

"I would expect Albertson's to keep American Stores' real-estate people and keep the systems people," Levin said.

Analyst Chuck Cerankosky, McDonald & Co., Cleveland, said Albertson's "probably realized not everybody wants to live in Boise" and couldn't wait for the deal to close to begin hiring staff.

"There might be some gaps and they will need to do some hiring for those positions," Cerankosky said. In regard to the capital projects, he added, "It's important to have the architects and engineers in place if you're going to keep the momentum going."

He pointed out that if Albertson's effectively doubles its work force after the merger, the combined company would then rival Cincinnati-based Kroger's 212,000 head count. That doesn't include the 80,000 employees at Fred Meyer Inc., Portland, Ore., which Kroger is in the process of acquiring.