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Supervalu Strengthens Team

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Supervalu Inc. (SVU - Free Report) has made additional appointments to its new executive team following the completion of the strategic sellout of its markets to Cerberus Capital Management LP.

Under the leadership of former OfficeMax Inc. Chief Executive Officer Sam Duncan, who became Supervalu's CEO in Feb 2013, the company made many changes to its management team.

The executive team now includes two new entrants, Randy Burdick as executive vice president and chief information officer, and Michele Murphy as executive vice president, human resources and corporate communications.

Randy Burdick, who replaces Kathy Persian, has 28 years of experience at in leadership positions at several companies like Hewlett-Packard Company (HPQ - Free Report) and Advanced Micro Devices Inc. (AMD - Free Report) . Prior to joining Supervalu, Burdick had served OfficeMax for eight years as chief information officer.

Michele Murphy, who replaces Dave Pylipow, has 30 years of experience. She had served Supervalu as senior vice president of corporate human resources and labor relations for the last seven years.

J. Andrew Herring is expected to leave the company following the completion of the deal on Mar 25, 2013. Herring held the position of executive vice president of real estate, market development and legal in Supervalu since 2010.

As a part of broad-based strategic alternatives, Supervalu will sell Albertson's, Jewel-Osco, Acme, Shaw's and Star Market chains, all of which combined come to about 877 stores. These go to private equity firm Cerberus Capital Management LP, for $3.3 billion.

Management commented that it wants to streamline its operations in order to focus on Save-A-Lot discount stores, as well as its smaller regional chains Cub, Farm Fresh, Shoppers, Shop 'n Save and Hornbacher's.

Very recently, Supervalu reshuffled its management team. Michael Moore, the present chief marketing officer, was replaced by Mark Van Buskirk, from Supervalu’s rival grocery chain The Kroger Company. He will take up the responsibility of executive vice president of merchandising and marketing in the company.

Supervalu missed estimates in the third quarter of fiscal 2013 and also posted lower earnings from the year-ago quarter. Moreover, the company reported negative identical store sales successively for the past four years. The trend has continued in the first half of fiscal 2013.

Now, in order to combat four successive years of negative identical store sales and re-position the company for growth, Supervalu is geared for expansion of its private brand portfolio and to step up cost-reduction initiatives.

These are expected to reduce administrative and operational expense by an additional $250 million by fiscal 2014.

We believe that the executive management turnaround could prove beneficial to Supervalu’s bottom line as all the new appointees have extensive retail and grocery experience.

Currently, Supervalu carries a Zacks Rank #3 (Hold).

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