American Plans Big Outlays to Upgrade Lucky Stores, Expand
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American Stores said late Friday that it plans to spend $500 million to build new stores and upgrade existing ones as it takes over rival Lucky Stores.
American also said that it has completed financing arrangements for the $2.5-billion acquisition and acknowledged that it is taking on a “substantial” debt load to acquire the 95.4% of Lucky’s stock that has been received.
American Stores said it will convert its 240 Alpha Beta stores in California to Lucky markets “when feasible” and stated that the Alpha Beta name will continue “for some time.” It also noted that due to a Federal Trade Commission ruling, it must sell at least 31 stores in California once the merger is completed.
The merger and sales of stores, the company said, will result in a “minimal” number of lost jobs, but the company declined to say how many.
The combination of Lucky, which operates 481 stores in four states, and American, which operates other supermarket chains, will give American nearly 1,600 stores and 130,000 employees in 39 states, making it the nation’s largest supermarket company.
In California, where there will be about 600 stores, American will adopt Lucky’s low-pricing policies for all of the markets, the company said.
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