AHOLD AGREES TO ACQUIRE MAYFAIR

ELLIOT ZWIEBACH

ELIZABETH, N.J. -- Netherlands-based Ahold has continued its aggressive U.S. expansion strategy by agreeing to acquire Mayfair Super Markets here.

Ahold USA, Parsippany, N.J., Ahold's wholly owned subsidiary, signed a letter of intent last week to purchase the 28-store chain, ending persistent acquisition speculation concerning Mayfair.

The sale is expected to close at the end of July. The selling price was not disclosed, although observers said it is likely to include Mayfair's estimated $140 million in debt. Mayfair operates 28 Foodtown stores in northern and central New Jersey, with 1994 sales of about $600 million. According to Frank Curci, president and chief financial officer of Mayfair, it is the largest supermarket chain in New Jersey operating under the franchised Foodtown name. Hans Gobes, Ahold's senior vice president of communications, told SN his company was interested in acquiring Mayfair "because it has tremendous potential. It's in a good market area, and if you look at how it competes, it's doing very well. "And with possible synergies from becoming part of Ahold, we see great economic potential there." Curci declined to say why the company had decided to sell to Ahold. Gobes said it is "still too early" to say whether Ahold will operate Mayfair as a separate division or incorporate the stores into one of the company's other divisions. "That's something we'll be looking at in the coming weeks," he told SN. Ahold USA owns five U.S. supermarket chains with combined 1994 sales of $7.4 billion: Bi-Lo, Mauldin, S.C., with 262 stores; Giant Food Stores, Carlisle, Pa., with 65 stores; Finast, Maple Heights, Ohio, with 40 stores; Tops Markets, Buffalo, N.Y., with 172 stores; and Edwards Super Food Stores, Windsor Locks, Conn., with 69 stores.

Ed Comeau, a securities analyst with Lehman Bros., New York, said he believes Ahold may convert the Mayfair units to the Edwards banner "because of conflicts with other Foodtown operators over advertising and private labels -- and the fact that it's not in Ahold's interest to operate stores under the Foodtown name." The Foodtown logo is controlled by Twin County Grocers, Edison, N.J., which is Mayfair's wholesaler. Edwards is supplied by C&S Grocers, Brattleboro, Vt.

According to Comeau, Mayfair's results the past few months "have been OK, but not spectacular," varying with the overall economy. He also said competition has heated up as Pathmark Stores, Woodbridge, N.J., has opened more Pathmark 2000 units and ShopRite has become sporadically more aggressive.