Bi-Lo Holdings LLC’s loss from a Federal Trade Commission order is turning into Rowe’s IGA’s gain.
As a condition to approving Bi-Lo’s addition of 134 supermarkets formerly owned by the Delhaize Group, the FTC is requiring Bi-Lo to divest 12 stores in markets where the acquisition would significantly reduce competition.
Rowe’s, which currently operates six supermarkets in the Jacksonville area, is taking advantage of the opportunity to expand into new markets by acquiring four of the 12 stores.
The new Rowe’s stores will be in Arcadia, Dunnellon, Lake Placid and Wauchula. The Dunnellon store, in Marion County, is the closest one to Jacksonville.
Rob Rowe, who began creating his chain of independent grocery stores in 2005, said he doesn’t anticipate any problems running the stores in distant markets.
“We’re very confident in our ability to operate the stores,” he said by telephone Wednesday as he was visiting the new stores.
Rowe said he expects to close on the acquisition of the first store on March 22 and then complete one acquisition a week after that. He said the stores will shut down for about a week after the acquisition and then reopen as Rowe’s IGA supermarkets.
Rowe told the Daily Record last month that he was hoping to double the size of the chain, and that plan included the four stores the company is buying from Bi-Lo. He also said he wanted to open at least two more locations in the Jacksonville area.
“We’re still looking,” Rowe said Wednesday. “We’ve got several opportunities. Whatever makes sense, we’ll do.”
Jacksonville-based Bi-Lo, the parent company of the Winn-Dixie and Bi-Lo supermarket chains, agreed last year to buy the Sweetbay, Harveys and Reid supermarket chains from Delhaize. The four stores that will be sold to Rowe’s currently are Sweetbay locations.
Bi-Lo is selling eight Harveys and Reid’s stores in Florida, Georgia and South Carolina to three other companies.
In addition under the FTC order, two of the stores that were scheduled to be acquired by Bi-Lo will be retained by Delhaize and converted into Food Lion stores.
Food Lion is the main U.S. supermarket chain owned by Belgium-based Delhaize.
The FTC said in a news release that it required the divestitures because “Bi-Lo’s proposed acquisition of the Delhaize stores would likely harm consumers through higher prices, diminished quality and reduced service levels” in 11 local markets in the three states.
Bi-Lo, which currently operates 697 stores in eight Southeastern states, also said it is closing eight of the Delhaize stores it is acquiring plus four Winn-Dixies and one Bi-Lo supermarket.
The closures include a Harveys supermarket in Green Cove Springs.
“Given the number of stores we are acquiring, we anticipated that we may be asked by the FTC to divest some stores to close the deal. In addition, with the close proximity of some of the Bi-Lo Holdings and Delhaize stores, we also knew that we would have to close a few stores as part of the acquisition,” Bi-Lo President and CEO R. Randall Onstead said in a news release.
Bi-Lo in September filed plans with the Securities and Exchange Commission for an initial public offering under a new holding company called Southeastern Grocers Inc.
The company is currently owned by funds managed by Dallas-based private equity firm Lone Star Funds.
The company has not said when it intends to launch the IPO.