SMART & FINAL STORES CORPORATION

Smart & Final caters to caterers -- as well as small businesses, restaurants, and households across the western US. Its nearly 250 non-membership warehouse stores stock groceries, party supplies, paper products, cleaning supplies, and more, in bulk sizes and quantities. The stores operate under the Smart & Final, Smart & Final Extra!, and Cash & Carry banners in urban and suburban areas in Arizona, California, Idaho, Nevada, Oregon, and Washington, as well as in northern Mexico. Founded in 1871 in Los Angeles, the retailer later took the names of owners J. S. Smart and H. D. Final. The chain has been owned by private equity firm Ares Management since late 2012.

Change in Company Type

Former owner Apollo Global Management sold a majority stake in Smart & Final to Ares Management in November 2012 for $975 million. (Smart & Final's senior management retained its minority stake in the business.) Apollo acquired the majority share in Smart & Final in 2007 for about $890 million from France's Groupe Casino, which had owned the chain since 1984.

IPO

The company's Smart & Final Holdings Corp. filed in 2014 to go public, hoping to raise more than $300 million. It's looking to whittle down its about $1 billion in debt outstanding.

Geographic Reach

Smart & Final operates stores in Arizona, California, Idaho, Nevada, Oregon, and Washington. Outside the US, Smart & Final operates more than a dozen stores in Mexico through a joint venture with Calimax, a major grocery store operator there.

Sales and Marketing

Smart & Final serves several customer types, including food service and household customers. Its food service clients are typically operators of small restaurants, catering companies, businesses, clubs, and civic organizations.

Operations

In addition to 190-plus Smart & Final Warehouse stores, the retailer also operates about 50 stores under the Smart Foodservice Cash & Carry name. The stores carry a broad range (more than 13,000 products) of restaurant-quality food, food service supplies, and culinary equipment. In addition, the grocer operates more than 70 Smart & Final Extra! stores.

Financial Analysis

Smart & Final's stores rang up an estimated more than $2 billion in sales in 2013, a flat comparison versus both 2012 and 2011. This is down from $2.4 billion in 2010. The decrease in sales resulted, in part, from the sale of 34 Henry's Farmers Market and nine Sun Harvest stores in 2011.

Strategy

Few changes in the operation of Smart & Final are expected following the change in ownership in late 2012. Under Apollo, Smart & Final had been opening larger stores, including more than 30 under the Smart & Final Extra banner in California. Smart & Final Extra! stores (10,000 to 15,000 square feet) are larger than traditional Smart & Final locations and house expanded selections of products for both business and household customers. The warehouse chain has also been exploring new markets, but is quick to pull the plug when they don't meet its expectations. Failed experiments can cost up to $70 million.

Divestments

On the strength of the recovering economy, Smart & Final cashed out of its investment in the 34 Henry's Farmers Market and nine Sun Harvest stores (acquired in 2007) by selling them to Sprouts in 2011. As part of the deal, owner Apollo Management became the majority owner of the combined Sprouts-Henry's company, while remaining the principal equity owner in Smart & Final.

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SMART & FINAL STORES CORPORATION


600 Citadel Dr
Commerce, CA 90040-1562
Phone: 1 (323) 869-7500
www.smartandfinal.com

STATS


  • Employer Type: Unknown
  • Pres-chb-ceo: Ross Roeder
  • Manager Construction: Jon Rudolph
  • Ceo: Etienne Snollaerts

Major Office Locations

  • Commerce, CA
  • Los Angeles, CA

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