Sunday, January 24, 2010

Piggly Wiggly Enters $28 Million Sale Leaseback of Distribution Center in SC

The Post and Courier - January 23, 2010

Piggly Wiggly Carolina Co., which operates 110 grocery stores throughout the Southeast, has sold its main, 615,650-square-foot storage warehouse near Summerville to a Charleston real estate investment company, which is leasing the space back to the supermarket chain.

The $28 million sale and lease-back deal will allow the company to focus on its core business of selling groceries and tap valuable cash to invest, said David Schools, Piggly Wiggly Carolina's chief executive officer.

"It'll help us manage our debt better and put more money into our current locations," he said, noting that a handful of stores are due for remodeling.

In 2008 the grocer made a similar deal with its truck fleet by selling it to Miami-based Ryder Systems and leasing the vehicles back to minimize risk and cut costs.

Piggly Wiggly Carolina sold its main distribution center to Charleston-based J.L. Woode, which already manages two other facilities for the supermarket operator -- its corporate headquarters building on Croghan Spur Road in West Ashley and a 428,887-square-foot warehouse in North Charleston.

While one reason for the sale was to generate cash, Schools said the deal isn't a sign of financial hardship.

"It's just a sign of us taking an asset and positioning it to best help us in the future," he said.

The move won't affect payroll at the company, Schools added. He said Piggly Wiggly employees will continue to maintain the facility under the long-term lease agreement.

The company built the distribution center in the Jedburg area along Interstate 26 in 1999. Sphere: Related Content

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