The new owner of Supervalu is selling all but one of its Hornbacher’s stores to Coborn’s in a deal that saves the Fargo-Moorhead area grocery chain and a revenue stream for itself.
Seven Hornbacher’s locations in Fargo, N.D., and Moorhead, Minn., will remain open and keep their name under St. Cloud-based Coborn’s ownership. An eighth store that’s under construction in West Fargo is also part of the deal.
The Hornbacher’s store in Grand Forks, N.D., was not included in the sale and will close following liquidation, which begins Monday, Supervalu said Friday.
“Hornbacher’s is a respected grocery retailer, they’re doing everything right,” Chris Coborn, chief executive of Coborn’s, said in a statement. “We intend to let them continue operating as is so there is no change to their guest experience.”
Matt Leiseth, who has led Hornbacher’s for eight years and is currently its president, will continue to be in charge of those stores, Coborn said.
United Natural Foods Inc., which bought Eden Prairie-based Supervalu in October for $3 billion, is focusing on its wholesale business and selling the retailers, including Stillwater-based Cub Foods, that provided about 30 percent of Supervalu’s revenue.
UNFI hopes to sell most of Supervalu’s retailers to grocery chains that will continue to use Supervalu as their wholesale supplier. The sale of Hornbacher’s to Coborn’s, already a customer of Supervalu, does that.
“Finding a strategic buyer for Hornbacher’s with continued supply opportunity was a top priority,” Sean Griffin, Supervalu’s chief executive, said in a statement. “Coborn’s is a longstanding Supervalu wholesale customer and we’re excited that they will carry on the Hornbacher’s name and tradition of quality products and service.”
Terms of the deal weren’t immediately disclosed. The transaction is expected to close before Christmas.
Ted Hornbacher opened his first store in Moorhead under the name Ted’s Supervalu in 1951. The name later was changed to Hornbacher’s and expanded to eight locations. Supervalu bought the grocery store chain in 1975.
UNFI still hopes to sell the 78-store Cub chain in one unit, executives said recently.