The new year brought some good news to Save A Lot.
The discount grocer said it has reached an agreement with a substantial majority of its lenders to recapitalize the business and deleverage its balance sheet. Under the terms of the agreement, Save A Lot will receive $138 million in new capital to strengthen its business and provide financial flexibility.
In addition, the agreement provides for a reduction of indebtedness of over $400 million, strengthening the retailer’s balance sheet and significantly reducing annual interest expense.
“The agreement with our lenders is an important step in securing Save A Lot’s long-term success,” said Kenneth McGrath, CEO, Save A Lot, which operates more than 1,100 corporate and licensed stores in 33 states and 14 wholesale distribution centers. “This is a significant statement of confidence in our business and gives us the appropriate levels of capital to compete effectively.”
Save A Lot has been working to modernize it in-store shopping experience. As part of the effort, the grocer announced in November the rollout of new services that will enable shoppers to pay for (using Amazon PayCode) and pick up Amazon.com packages in select stores in the St. Louis area.
It will also shoppers offer Amazon Hub Locker as a convenient delivery option to pick up or return Amazon packages at no additional cost. Both Amazon PayCode and Amazon Hub Locker are expected to expand to more than 400 Save A Lot stores by the end of 2020.
The agreement is subject to finalization of definitive documentation and certain creditor approvals. Save A Lot expects to complete this process in the first quarter of 2020.