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The comprehensive management shakeup this week at Southeastern Grocers, parent of the Bi-Lo, Winn-Dixie and Harveys banners, may stem from the Jacksonville, Fla.-based retailer's failed attempt to mount a successful initial public offering (IPO), according to industry expert Burt P. Flickinger III, managing director at New York-based Strategic Resource Group.
The pressure on the company is magnified by Albertsons' impending IPO, with which Southeastern Grocers would want to be favorably compared, particularly during this present era of robust merger-and-acquisition activity, notes Flickinger. As such, the executive moves could have resulted from a desire on Southeastern Grocers' part "to stimulate additional performance to lead to an IPO," he says.
While acknowledging that major changes of senior merchants at a company twice within a single year was "surprising," Flickinger notes that it's not unusual for a new CEO to restructure an executive team after a half a year of evaluation and analysis. When asked what impact Ian McLeod had made at Southeastern Grocers since being named to helm the company this past January, Flickinger says it's too soon to tell because it generally takes about two years to assess a new CEO's performance.