ARCADIA — Vons Cos., Southern California's biggest grocer, is gobbling up 53 Builders Emporium leases in a shutout strategy against competitors.
Builders Emporium, based in Irvine, is liquidating its 97 home improvement stores, which are about the same size as supermarkets. Analysts expect Vons to convert six or eight to markets and hold the others until commercial rents rebound--then market them to non-rivals.
"It shows how ingenious Vons' management is," Salomon Bros. analyst Jonathan Ziegler said.
"First they're going to make money off the financial transaction, and secondly it's a defensive move because you're controlling who's in your market area. My understanding is Ralphs (supermarket chain) was looking at some of the sites."
Financial terms of the deal were not disclosed.
Ziegler spoke with the San Gabriel Valley Newspapers, which published a story on the Vons deal this week. Vons' headquarters in Arcadia is in the San Gabriel Valley, east of Los Angeles.
"I guess the strategy behind it is to buy the sites with the intent of keeping out the competition and dictating what happens to those sites that way," Crowell Weedon & Co. securities analyst Douglas Christopher said.
The deal with Builders Emporium is expected to close in January. Vons spokeswoman Mary McAboy said it has not yet been decided how many of the facilities will be converted to markets.