MAYFAIR TIE SEEN AIDING EDWARDS

ELIZABETH, N.J. -- Ahold's acquisition of the 28 Mayfair Super Markets operating in northern and central New Jersey is expected to pump added energy into Ahold's Edwards operation in the region.

boost Edwards' buying power. And, if Ahold switches Mayfair's Foodtown banner to that of Edwards, as many expect, it will reap an enlarged market presence and economic profile in the region. Indeed, the acquisition gives Ahold a virtual sweep of the East Coast, from Mayfair in New Jersey to Tops Markets in upstate New York; Edwards Super Food Stores in New York, Massachusetts, Connecticut and Rhode Island; Giant Food Stores in Pennsylvania, Maryland, Virginia and West Virginia; Bi-Lo in the Carolinas, Georgia and Tennessee, and Finast in Ohio.

Worldwide, Ahold operates stores in The Netherlands, the Czech Republic, Portugal, Poland and the United States, chalking up worldwide sales exceeding $17 billion, with net earnings in 1994 of $236 million. Mayfair-operated stores generated volume of $600 million last year, which Ahold said will boost its U.S. sales to more than $8 billion in 1995, compared with more than $7 billion last year. The Mayfair acquisition has added another supermarket chain and additional synergy possibilities to Ahold's East Coast stronghold, and has raised speculation

about precisely how closely Mayfair will be tied to Ahold's Edwards operation.

Mayfair's management will report to Tony Schiano, president and chief executive officer of Edwards, based in Windsor Locks, Conn.

The Foodtown name -- which is franchised by Mayfair's wholesaler, Twin County Grocers, Edison, N.J. -- will remain on the stores for several months until Ahold decides whether to rename the stores Edwards or use some other banner, Tonya Lyon, manager of consumer affairs for Edwards, told SN. When Red Food Stores, Chattanooga, Tenn., was acquired by Ahold in April 1994, it operated for a time under its own name as a division of, and was managed by, Bi-Lo, Mauldin, S.C. However, the decision was eventually made to convert the Red Food units to the Bi-Lo banner.

Also undetermined is how existing Mayfair management will be combined with existing Edwards management, Lyon told SN. "That's something that will be considered over the next several months, but until a decision is made, we don't anticipate any changes in management," she said. Robert Zwartendijk, president of Ahold USA, Parsippany, N.J., said the geographic positioning of Mayfair between Edwards and Giant offers "many excellent opportunities for synergies." An industry observer said synergies are likely to develop in the area of private label and better use of distribution centers. "And if Mayfair operates as part of Edwards, then it will give Edwards, which has not been expanding, more critical mass for improving buying and logistics," he said. Decisions on how to expand the former Mayfair group of stores are also pending, Lyon added. "We need to take the next few months to see what stores we have, how profitable each one is and whether there are gaps in the operation." According to Zwartendijk, "Mayfair is a prominent and profitable company in New Jersey, a densely populated state with above-average purchasing power, and it has an outstanding reputation with its customers." The Mayfair units compete mainly against three New Jersey-based operators: A&P, Montvale; Pathmark Stores, Woodbridge, and ShopRite Supermarkets, the retail group supplied by Wakefern here. According to Gary Giblen, managing director of Smith Barney, New York, "Mayfair has been a well-merchandised upscale chain, with good Jewish and Italian specialties, but weak on expense controls, and I expect Ahold will improve those controls while maintaining the strong merchandising programs." Giblen likened the situation to the one existing when A&P acquired Waldbaum's several years ago. "Waldbaum was great at merchandising but lacking in systems and cost controls, and A&P added those."

Concurrent with Ahold's disclosure that the acquisition of Mayfair had been completed, Mayfair said it will offer to buy all outstanding 11-3/4% senior subordinated notes due 2003 for cash at 116% of principal amount, plus accrued interest, and solicit consent to proposed amendments to the indenture. The acquisition's price includes assumption of Mayfair's outstanding debt -- estimated by observers to be about $140 million -- and capital leases.