The discount grocery chain sold 51 Tampa Stores to Fresh Encounter as part of ongoing re-licensing program.
Save A Lot has sold its 51 company-operated stores in the Tampa, Florida market to Fresh Encounter, a current Save A Lot Retail Partner licensee, as the grocer continues to convert its corporate-owned stores to local operations.
The sale is part of an ongoing re-licensing program through which Save A Lot intends to transition to a wholesale model by selling more than 300 corporate-operated locations to new and existing retail partners who will continue to operate the stores under the Save A Lot banner, including Fresh Encounter.
“We are excited to expand our partnership with Michael Needler and the Fresh Encounter team, who have been fantastic partners, strong operators and excellent ambassadors of the Save A Lot brand,” said Kenneth McGrath, CEO at Save A Lot. “Through the re-licensing transactions we are executing across our footprint, we believe that we will be even better positioned to continue to serve the communities in which we operate. We currently have a dedicated group of retail partners that we support and we look forward to helping other entrepreneurs own, operate and succeed in their own business.”
To date, Save A Lot has executed seven sale transactions, comprising 82 stores, including those being sold to independent retailer Fresh Encounter. As multiple sale transactions near completion, the company expects to complete its re-licensing program in 2021.
Serving as a licensor and wholesale partner to over 200 independent owners and operators, Save A Lot is providing them the flexibility to customize their assortment to cater to the tastes and preferences of their local customers.
“The Fresh Encounter family of companies has a culture that prioritizes being positive, appreciative and resilient and we are eager to onboard the new Florida associates. Over the past several months I have toured stores in the greater Tampa market and I’m impressed with the Save A Lot team,” said Michael Needler, Jr. president and CEO of the Findlay, Ohio-based Fresh Encounter. “I am truly humbled to be joining them in delighting our customers, nourishing the communities and inspiring pride in the team. Kenneth and Kevin Proctor and the rest of the Save A Lot corporate team are transformative and we are equally eager to join their efforts in re-establishing the Save A Lot brand for tomorrow’s competitive environment.”
Fresh Encounter operates stores throughout Ohio, Kentucky and eastern Indiana under a variety of banners, including Great Scot, Community Markets, Germantown Fresh Market, Needler’s Fresh Market, Remke Markets, Sack n’ Save, King Saver and Chief Supermarkets.
PJ Solomon served as financial advisor and Troutman Pepper served as legal counsel to Save A Lot on the Fresh Encounter transaction.
At the beginning of the year, Save A Lot had made efforts to shore up its finances by cutting a deal with a substantial majority of its lenders to recapitalize the business and deleverage its balance sheet. It inked a deal to get a $350 million capital infusion in new capital from a combination of new and existing lenders to support the discount grocery chain’s operations and the acceleration of its transformation plan.
Additionally, Citizens Commercial Banking was the lead left arranger on a $150 million asset-based revolver for St. Ann, Missouri-based Moran Foods LLC, which owns and operates Save A Lot.
“We were able to provide a great solution for Save A Lot that offered them a more flexible capital structure,” noted Jaime Ward, head of retail finance at Providence, Rhode Island-based Citizens.
Meanwhile, the grocer will continue to operate 21 corporate stores locally in St. Louis.