Smart & Final caters to caterers -- as well as small businesses, restaurants, and households in the western US. Its 235 non-membership warehouse stores stock groceries, party supplies, paper products, cleaning supplies, and more, in bulk sizes and quantities. The stores operate under the Smart & Final, Smart & Final Extra!, and Cash & Carry banners in urban and suburban areas in Arizona, California, Idaho, Nevada, Oregon, and Washington, as well as northern Mexico. Founded in 1871 in Los Angeles, it later took the names of owners J. S. Smart and H. D. Final. The chain's owner Apollo Management has agreed to sell a majority stake in Smart & Final to private equity firm Ares Management for about $975 million.
Change in Company Type
The sale of a majority stake in the company to Ares Management is expected to close by the end of 2012. (Smart & Final's senior management will retain a minority stake in the business.)
Smart & Final also operates about 50 stores under the Smart Foodservice Cash & Carry name. The stores carry a broad range (more than 13,000 products) of restaurant-quality food, foodservice supplies, and culinary equipment. Smart & Final also operates about a dozen stores in Mexico under a joint venture agreement with the operators of Calimax, a major grocery store chain there.
Smart & Final stores rang up an estimated $2 billion in 2011 vs. $2.4 billion in 2010. The decrease in sales resulted from the sale of 34 Henry's Farmers Market and nine Sun Harvest stores in 2011.
Under Apollo's ownership, Smart & Final has been opening larger stores, including more than 30 under the Smart & Final Extra banner in California. Smart & Final Extra stores (10,000 to 15,000 square feet) are larger than traditional Smart & Final locations and house expanded selections of products for both business and household customers. The warehouse chain has also been exploring new markets, but is quick to pull the plug when they don't meet its expectations. The company closed five Denver-area SmartCo Foods stores that opened in summer 2010 in mid-December, citing disappointing sales at the new locations. The failed experiment cost an estimated $40 million to $70 million.
On the strength of the recovering economy, Smart & Final cashed out of its investment in the 34 Henry's Farmers Market and nine Sun Harvest stores(acquired in 2007) by selling them to Sprouts in 2011. As part of the deal, which closed in April, owner Apollo Management became the majority owner of the combined Sprouts-Henry's company, while remaining the principal equity owner in Smart & Final. – less