Lawsuit claims former owners stripped Bruno’s of $290 million | al.com.
But extremely difficult to prove, or if is proven, to actually win a case on. Essentially, Lone Star Funds stripped Bruno’s of cash, as said above, and then sent it into bankruptcy. This ended a cycle of repeated leveraged buyouts that turned a once-thriving regional chain into a shell of its former self. But don’t take my word for it:
Regional grocers have been frequent targets for leveraged buyouts, with Bruno’s itself being bought that way once before. (The first purchase, by Kohlberg Kravis Roberts & Co., also led to bankruptcy.)
Observers of the industry say that even though supermarkets have razor-thin profit margins, they’re attractive because they take in so much cash.
“There’s a cash flow, and some of the expenses you can control and reduce quite a bit,” said David Livingston, a supermarket consultant based in Pewaukee, Wis.
The savings usually goes to pay down debt and into the pockets of the buyout firm, said Page, the Indiana professor.
But reducing expenses usually means fewer employees and less investment in stores, which tends to turn off customers. “I can’t ever say that the situation got better at the store level,” Livingston said.
Trust me — in Bruno’s case, nothing got better.
Mississippi’s still fattest but Alabama closing in on Yahoo! Health
Slowly, especially up stairs, and sometimes we have to catch our breath, but we’re coming.
Fish with lesions being caught around Mobile Bay – al.com
The state is warning not to eat fish with lesions around the throat. I suggest avoiding eating anything with lesions anywhere.
Southern Family Markets bids on Bruno’s stores; 13 in Birmingham area could close – al.com
Already down to 56 stores (from a high of, I would guess, over 200), nearly half the remainder (25) would close under this deal. Included among these is the store in perennially underserved Bessemer. This is still very nearly a best-case scenario. Also, the lawyers will get a million bucks, so they’re happy.
Added: Bruno’s pulls out of Montgomery.
After 75 years, lights out for Bruno’s Supermarkets – Business News from The Birmingham News – al.com
Bruno’s is getting auctioned off in bits and pieces today. Unless someone buys the whole chain — which is extremely doubtful — the best case scenario is that someone like Kroger’s buys a lot of the stores and keeps them open. But many stores are certain to close, especially in already hard-hit poor areas. Let’s congratulate the people responsible:
- The Bruno family, whose pursuit of a quick buck destroyed Joe Bruno’s legacy.
- Kohlberg Kravis Roberts, who began the process of stripping the chain for parts, allowed stores to deteriorate, and saddled it with debt, driving it into bankruptcy the first time.
- Ahold, the Dutch company that took over from KKR and did basically the same stuff for a few years.
- Lone Star Funds, the current owners, who have apparently stripped whatever KKR and Ahold couldn’t get from the carcass, and which has allowed the stores to deteriorate to such a degree that some of them are actually scary to enter.
- The employees, who are about as happy to work there as you’d expect, and who have refused to allow the union to make any further concessions to keep the stores open.
- The bankruptcy court, which is allowing the management to pay out $40 million in bonuses to poor, abused executives of the company.
And, okay, Wal-Mart and Publix. Still…
Alabama House Republicans roll out option to food tax reduction plan – al.com
African-American representatives have been trying to get a bill passed getting rid of the sales tax on food, but with no success. The Republicans, of course, aren’t helping. Instead, they want to give “tax credits” to poor families to offset the tax. Because that’s much simpler. Actually, they don’t want to have to raise income taxes on rich people to pay for the tax cuts so that poor people can afford to buy groceries. How the tax credits are supposed to be paid for is anyone’s guess.
Bruno’s could close stores if no buyer is found | TuscaloosaNews.com | The Tuscaloosa News | Tuscaloosa, AL
Bruno’s is a veteran, once locally-owned, grocery chain that once upon a time dominated the local market. And then, it was bought out by the geniuses at KKR, and as was so often the case, handed around to other owners who picked it clean until it was utterly ruined. And now, a large employer is on the verge of collapse, and if someone doesn’t buy in thousands of people will be out of jobs. Obviously, this is because of unions.