Delhaize plans to sell three grocery chains, keep Food Lion

  • Posted: Thursday, May 30, 2013 12:59 a.m.

SALISBURY — In the latest shift for Food Lion’s parent company, Delhaize Group has made a deal to sell Sweetbay, Harveys and Reid’s to Bi-Lo for $265 million.

Bi-Lo will take over 155 stores, as well as leases for 10 former Sweetbay locations.

The sale will leave Delhaize with Food Lion, Bottom Dollar Food and Hannaford banners in the U.S., where Food Lion makes up the lion’s share of the Belgian grocer’s business.

A spokeswoman for Food Lion and Delhaize America, which are both based in Salisbury, said there are a limited number of functions at the Salisbury corporate office that support Sweetbay, Harveys and Reid’s.

Sweetbay is based in Tampa, while Harveys and Reid’s are headquartered Nashville, Ga.

“After the ownership transfer, we will review our corporate structure where specific or partial support of these banners exist in order to remain efficient or to reinvest resources in Food Lion, Bottom Dollar Food and Hannaford,” said Christy Phillips-Brown, Delhaize America spokeswoman.

Bi-Lo plans to retain all store-level employees at Sweetbay, Harveys and Reid’s, she said.

Delhaize will keep Sweetbay’s distribution center.

“We believe this transaction represents a significant move towards simplifying our business and will allow for even greater focus at Delhaize America,” Delhaize Group CEO Pierre-Olivier Beckers said in a statement. “The transaction will further increase the financial flexibility required to execute our strategic priorities.”

In 2012, the 165 stores included in the transaction generated revenues of about $1.8 billion.

The sale comes on the heels of Beckers’ announcement that he plans to retire by year’s end. Delhaize America laid off about 350 corporate employees earlier this year as part of a continuing reorganization that started in December with the ouster of Cathy Green Burns as Food Lion president.

In January, Delhaize America closed 33 Sweetbay stores in Florida, as well as eight underperforming Food Lion stores in North Carolina, Virginia and South Carolina. Bottom Dollar Food, based in Salisbury, closed three stores in the Philadelphia area.

In 2012, Food Lion closed 113 underperforming stores and pulled out of Florida. Delhaize America also shut down the Bloom brand.

This year, Delhaize Group reported revenue growth of 2.1 percent for the first quarter, comparable store sales growth of 1.9 percent in the U.S. and 2.4 percent in Belgium and underlying operating margin of 3.9 percent. The group’s increase in operating profit was the first in six quarters, raising hopes that cost-cutting measures and an overhaul of Food Lion stores are paying off.

More than 2,000 people work at Food Lion headquarters. Food Lion has 1,117 stores with 505 locations in North Carolina.

Contact reporter Emily Ford at 704-797-4264.

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