Lone Star Funds to Operate Bruno's as Separate Entity

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Lone Star Funds to Operate Bruno's as Separate Entity

GREENVILLE, S.C. -- Lone Star Funds, the private equity firm that owns Bi-Lo/Bruno's, said yesterday it's spinning off Bruno's Supermarkets from Bi-Lo, LLC in an effort to allow both chains to invest in their future success.

Bruno's will now be operated as a separate corporate entity. A total of 67 Bruno's stores, in Alabama and Florida, are included in the transaction. The stores operate under the Bruno’s, Food World, and Food Max banners.

David West, affiliated with Lone Star and formerly one of its principals, is now president and c.e.o. of Bruno's, Bi-Lo, LLC spokeswoman Joyce Smart told Progressive Grocer. Scott North will continue as v.p. of store operations at Bruno's, and several other infrastructure positions will be in place. Bruno's headquarters will return to Birmingham, Ala.

In addition to the reorganization, seven unprofitable Food World/FoodMax stores will be closed on April 7, Lone Star said. Those stores include Food World units in Birmingham, Irondale, and Leeds, Ala.; a Food World in Pensacola, Fla.; and FoodMax units in Anniston, Gadsden, and Northport, Ala.

"This reorganization will allow both supermarket chains to build on their strong brand reputations," said Len Allen, president of Lone Star US, in a statement. "Both have strong store management teams, strategic store locations in one of the country's fastest-growing regions, and both enjoy a long tradition of customer and community service."

Allen also said that resources can be better focused to each chain once they operate independently.

During the reorganization process, Bi-Lo will work with Bruno's to ensure a smooth transition, said Brian Hotarek, Bi-Lo's recently appointed president and c.e.o. "We will provide transition support in areas such as IT, accounting, and merchandising until other support services are established," he said.

Going forward, Bi-Lo will concentrate its efforts and financial resources on a group of more than 230 supermarkets in core markets across its four-state market area. In the past year Bi-Lo has announced capital investments of more than $160 million in several of its core trade areas, including Greenville, Simpsonville, Rock Hill, and Myrtle Beach, S.C.; Chattanooga, Tenn.; and Charlotte, N.C.

In addition, the company has already invested in its IT infrastructure and has begun work with two nationally respected consulting firms, Karabus and Willard Bishop, to improve business processes, reduce costs, and build a sustainable advantage over competitors.

Founded by Joe Bruno as a family store 75 years ago, Bruno's Supermarkets serves major markets in Alabama and the panhandle of Florida.

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