SUPERVALU STARTS STORE RESTRUCTURING

ELLIOT ZWIEBACH

MINNEAPOLIS -- Supervalu here last week made the first move in its program to restructure corporate retail operations.

The company said it will close two Twin Valu supercenters and convert 11 Laneco stores to a different format.

The company also said it will close seven other nongrocery units. The 11 Laneco food and discount general merchandise stores in Pennyslvania and New Jersey will be converted to a combination store format with less emphasis on soft lines and other nonfood categories.

Michael W. Wright, chairman and chief executive officer, said all the stores being closed were unprofitable and did not warrant continued investment.

Supervalu said in December it would sell or close about 30 stores as part of a restructuring of its 302-unit corporate retail group. "This action represents a significant first step in that plan," Wright said.

The affected stores, all part of the company's Laneco division, consist of the following:

Two Twin Valu supercenters. The 180,000-square-foot Twin Valu in Cuyahoga Falls, Ohio -- scheduled to close March 1 -- is being sold to an unnamed retailer, possibly Target, observers said. The same unnamed retailer has also agreed to buy a 15-acre parcel of land in Parma, Ohio, that Supervalu had intended as the site of an additional supercenter. The Cuyahoga Falls Twin Valu opened in March 1989.

The Twin Valu in Euclid, Ohio,

will be closed sometime after March 1 and is expected to be sold. It is also 180,000 square feet and opened in April 1990.

Two food-only Twin Valu Foods units in Canton and Maple Heights, Ohio -- which opened with the same name for the sake of advertising economies, observers pointed out -- will remain open, the company said.

Eleven Laneco stores, including eight in Pennsylvania and three in New Jersey. Supervalu said it will convert those 11 units to a supermarket combination store format, which will also be called Laneco.

Five department stores, including three Lane units in Pennsylvania and one in New Jersey, and one Bright's in Pennsylvania.

Two crafts stores, called Pets, Crafts and Things, located in Pennsylvania.

The bulk of the Laneco division was part of Supervalu's October 1992 acquisition of Wetterau Inc., Hazelwood, Mo. Twin Valu has been part of the 52-unit Laneco group since 1993.

With the closing of the nine Laneco division stores, 43 stores will remain in the group, including 22 supermarkets (nine Foodlane and 13 Ultra stores), 14 supercenters and seven drug stores in Pennsylvania, New Jersey and Delaware.

Gary Giblen, managing director of Smith Barney, New York, said the shutdown of the Twin Valu supercenters "is a good step in resolving a chronically insoluble problem.

"Those two stores did poorly because of the intensity of competition in the Greater Cleveland market and the fact that supercenters are an unproven format. And the Lanecos were losers from day one, even before Supervalu acquired them from Wetterau."

Future store closings by Supervalu could include some corporate Cub Foods outlets, Giblen said. Wright said about 1,040 employees will be affected by the nine store closings -- about 800 at the two Twin Valu supercenters, most of whom work part-time, and 240 people at Laneco.