British Firm to Unload Kings

PARSIPPANY, N.J. -- After several abortive attempts, Marks & Spencer has once again lined up buyers for Kings Super Markets, the once family-held chain based here. The price is $61.5 million, about half the $110m the British retailer paid for the chain in 1988, while the buyers are an investor group consisting of private-equity firms Angelo, Gordon & Co. and MTN Capital Partners LLC, and retail industry veteran Bruce Weitz.

Owned by London-based M&S since 1988, Kings is an upscale grocer with 26 locations in New Jersey and on Long Island, New York, founded and run for many years by the Bildner family.

Angelo Gordon and MTN Capital are co-sponsors, while Weitz is the operating partner in the deal. In addition to having been c.e.o. of Duane Reade Drugstores and Today's Man, Weitz has served as president of First National Supermarkets and Grossman's Home Centers. He has also held executive positions at Wakefern Food Corp./ShopRite Supermarkets and Price Chopper Supermarkets.

"I view the pending transaction as an extremely positive development for the entire Kings team," said Dan Portnoy, c.e.o. of Kings, in a statement. "I'm looking forward to working with [the investor group] and dedicating my time and energy to building the Kings franchise."

Angelo Gordon's spokesman Adam Isserlis told Progressive Grocer that the investor group would operate Kings in a "business as usual" mode, and was not planning to lay off any employees, but would instead concentrate on "growing the business."

"Kings has strong locations in attractive markets, and we believe the company is well positioned for continued success," added Angelo Gordon director Brent Leffel. MTN managing partner Olivier Trouveroy noted, "In our view, the high-end gourmet food retailing industry is an attractive sector and MTN Capital's investment partners bring the capital and operating expertise required to make this a very successful investment."

In a statement, Marks & Spencer's group finance director Ian Dyson said the "disposal of Kings is the last part of our program to refocus Marks & Spencer. Kings is a strong brand with a committed workforce, but it doesn't fit within our core business."

Marks & Spencer has had Kings on the block since 1999, but separate attempts to sell the business to gourmet New York grocers D'Agostino and Gristede's were unsuccessful due to each retailer's inability to obtain financing.

In the news Web site, Angelo Gordon's Leffel was quoted as saying this time, financing will not be a problem. "We have the money," he said. He added the new owners will expand in New Jersey and eventually elsewhere.

New York-based grocery expert Burt Flickinger of the Strategic Resource Group told Progressive Grocer called the deal "good news" for everyone involved. "There's a huge sigh of relief at Marks & Spencer that they sold the company to Bruce Weitz," he said.

While Flickinger said Kings is a "terrific" company with "tremendous opportunities," among them great locations, good stores, and very loyal consumers, under M&S it did not fully address its many opportunities, "which Weitz and his team will work on with real determination and effectiveness."

The transaction is expected to close in the second quarter of 2006.
-- Bridget Goldschmidt
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