The Charleston company that has run Piggly Wiggly supermarkets for 67 years plans to get out of the grocery business and then close its doors for good.
Greenbax Enterprises Inc., the privately held parent of Piggly Wiggly Carolina Co., is asking shareholders to approve selling its retail and wholesale grocery businesses by the end of the year and dissolving the company within three years, The Post and Courier reported Tuesday, citing a summary of the plan the newspaper obtained.
Company officials confirmed the plan to Supermarket News on Wednesday.
Two sales
Greenbax would sell its wholesale operation to C&S Wholesale Grocers Inc. of New Hampshire for $9.3 million, according to the notice. The sale would include Piggly Wiggly’s Greenbax customer loyalty program and service operations, and it is expected to close by Oct. 20, The Post and Courier reported. Supermarket News said the operations going to C&S include branding, marketing, store support, accounting and IT services.
C&S already supplies Piggly Wiggly stores. It has done so since the chain shut its distribution centers in North Charleston and Jedburg about a year ago, according to The Post and Courier.
The company’s own supermarkets would go to independent operators. The notice put the number of remaining company stores at 19 and said Greenbax had verbal agreements with buyers for 17 of them, The Post and Courier reported. The company told Supermarket News it was working on separate deals to sell its 20 corporately owned stores but declined to name the buyers. Christy Boudolf, Greenbax’s senior director of marketing and advertising, said the company expects all of the stores to be sold.
Another 30 Piggly Wiggly stores are independently owned and are expected to stay with their current owners, Boudolf told Supermarket News.
It is not clear whether the stores being sold will keep the Piggly Wiggly name, The Post and Courier reported.
“Greenbax and C&S Wholesale Grocers are financing the purchase of many Piggly Wiggly stores by entrepreneurs who will operate them as truly local businesses owned entirely by local citizens of South Carolina and Georgia,” David Schools, Greenbax’s president and chief executive, said in a statement quoted by Supermarket News.
What owners would get
Greenbax has an employee stock ownership plan, and current and former workers who took part own its stock. As of March, 82% of the shares were essentially held by employees in a trust, The Post and Courier reported.
The deal needs approval from two-thirds of shareholders, and votes are due by 5 p.m. Oct. 15, according to the newspaper.
After expenses, the wholesale and retail sales are expected to bring in about $6.1 million, according to the notice. If both are approved, plan participants would receive an estimated $55 a share. An undisclosed number of senior executives would split $700,000 if they agree not to work for a competitor for at least four years.
Greenbax would then wind down its other holdings over the next 18 to 36 months, including real estate investments and a majority stake in a water bottling company. The notice estimates that shareholders would receive $175 to $225 a share after the final liquidation.
How it got here
Greenbax traces the decision to September 2012, when it hired an investment bank to study its “long-term strategic options” after deep declines in sales at its stores and its wholesale division, according to The Post and Courier. The board concluded that the company should leave the grocery business and “liquidate all of its remaining assets,” the notice said.
The company said its supermarkets could not keep up with rivals that have deeper pockets. That was also its explanation last September, when it agreed to sell 28 stores, including most of its Charleston-area locations, to Bi-Lo Holdings and Harris Teeter. Harris Teeter also took a store site under construction in Isle of Palms.
Those sales let Greenbax “repay all of its indebtedness and establish a reserve for future liabilities,” the company said, according to The Post and Courier.
Boudolf said in a statement Tuesday that the notice the newspaper obtained “is not intended for the public at this time,” and that the company’s position is that it “should not be published or made public until the pending transaction is completed.”
Schools said the stores would carry on under new owners.
“The Piggly Wiggly stores that are operating today in our trade area of South Carolina and Southeast Georgia will be operating tomorrow and beyond under different ownership but with the same great people and products that are there today,” he said.
Where it began
Joseph T. Newton Jr. founded the business in 1947 with a Piggly Wiggly franchise and a warehouse at the foot of Pritchard Street in Charleston, according to the company’s history. The company’s corporate offices are on Croghan Spur Road in Charleston.
