Roundy’s IPO: What’s the Point?
Not going to happen. That was the basic reaction of RetailWire BrainTrust members to reports earlier this year that Roundy’s was looking for a buyer. Most expressed doubt that any chains from a possible list of suitors, including Dominick’s, Kroger, Schnuck’s and Supervalu, would actually be interested in acquiring the chain. They were right.
Now comes reports that Roundy’s has chosen to go in another direction. The company will pursue an initial public offering in the hopes of raising $230 million.
According to various reports, Roundy’s owner, Willis Stein & Partners, is looking at the IPO as a means, pure and simply, to help recoup its investment in the grocer. So, why would someone invest in the company that some say is in decline?
David Livingston, RetailWire BrainTrust member and principal at DJL Research, told the Milwaukee Journal Sentinel that Roundy’s faces increased competition and loss of market share from Sendik’s, Target, Walmart, Woodman’s and others in its home market of Wisconsin as well as in Illinois and Minnesota where it also operates stores.
- Cost of Competing With Wal-Mart: $230 Million – TheStreet
- Roundy’s For Sale … Again – RetailWire
- Roundy’s plans to take company public with IPO – Milwaukee Journal Sentinel
- Rainbow Foods’ parent to float IPO – Star Tribune
Discussion Questions: Will going public help make Roundy’s a stronger retail company? What will it take to put Roundy’s on a stronger path to growth?