Monday, July 30, 2012

Supervalu Fires CEO, Stock Instantly Rises

Posted By on Mon, Jul 30, 2012 at 3:12 PM

In the shadow of dismal earnings and rampant rumors of its possible sale, Supervalu showed CEO Craig Herkert the door today, three years after being brought in to "help shake things up."

In a letter to Supervalu employees, including thousands of Treasure Valley Albertsons' workers, Chairman Wayne Sales said the company would "cut prices" and "make tough decisions" sooner than later, warning that the company's "biggest enemy was time."

Supervalu walked into the Treasure Valley six years ago, purchased the chain of grocery stores started by Joe Albertson and promised to have a significant presence in the Treasure Valley. But those promises were followed by a series of layoffs, including a round of finance department redundancies in January 2010, outsourcing of information technology positions in October 2011, and 130 more layoffs at the Boise corporate headquarters this past February. The company recently announced 20 more administrative positions would be cut from its Treasure Valley operations.

Supervalu employs approximately 2,300 workers at 33 Albertsons stores in Idaho, in addition to approximately 1,000 people at its Boise headquarters.

On July 11, Supervalu officials announced more than $250 million in administrative and operational expense reductions over the next two years. The company's earnings fell 45 percent in the latest financial quarter, and its quarterly dividend has been suspended.

Following today's announcement of Herkert's firing, Supervalue shares increased more than 12 percent on the New York Stock Exchange.

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