The recent announcement of Kroger’s intent to acquire Roundy’s fulfills the underlying goal of a financial owner: build the business and sell it within 5-7 years. Roundy’s went from a co-op format where member store owners were the owners to a single investment firm owning all of the company. That happened in 2002 at $750 million.
There were operations consolidations and refocused efforts on becoming first and foremost a retailer with a supporting fulfillment organization rather than being a wholesaler to numerous retail owner/members. Store groups sold all of their assets back to Roundy’s, a new distribution center was built to foster the supply chain, corporate offices moved to a prestigious location and the makeup of the company changed.
In 2007 (and again in 2011) there were rumors of Roundy’s being on the ‘for sale’ list. Speculation swirled around who the potential buyer would be. I saw firsthand the visitor log in the Roundy’s lobby showing that 3 Kroger execs were in Milwaukee to visit Bob Mariano. The economy was not favorable to a sale of the flagship Pick N Save banner (along with the Copp’s and Rainbow stores in Northern Wisconsin and Minneapolis).
Roundy’s once again pursued a transformation, taking the company public, leaving the Minneapolis market and concentrating on building a presence in Chicago. The senior leadership of Roundy’s was predominantly ex-Dominick’s talent, tapped by Mariano to reassemble the team from the glory days before the Safeway acquisition. Kudos to Roundy’s for transforming itself, gaining traction in a new market from the ground up, and positioning itself for the sale which the investors wanted to see happen. Although it took 13 years, much longer than anticipated, the investment firm has exited Roundy’s.
The lesson here is to always keep your eye on the strategic focus of the company. Roundy’s wanted to be a preeminent retailer in the Midwest. They achieved that status, maybe not on the first try, but with great success. It pays to keep your head up and try, try again.
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