Dive Brief:
- Alex Lee, Inc. announced Wednesday it has agreed to acquire W. Lee Flowers & Co. in a deal that brings together two regional distributors that also operate retail stores, according to a press announcement. The terms of the deal were not disclosed.
- W. Lee Flowers will retain all of its current employees and continue to operate from its Scranton, South Carolina headquarters as a subsidiary of Alex Lee. W. Lee Flowers’ top executives, chairman and CEO Heyward L. King, Jr. and president William Henry Johnson, Jr. will step down after more than 80 combined years with the company. Executive vice president Rick Geary will assume leadership of W. Lee Flowers.
- North Carolina-based Alex Lee owns and operates the Lowes Foods and Just Save grocery brands, which count 91 total stores, as well as wholesale companies Merchants Distributors LLC and Souto Foods. W. Lee Flowers distributes to 75 stores in the Carolinas and Georgia, including 50 stores it operates under the IGA and KJ’s Market brands.
Dive Insight:
In the announcement, executives with Alex Lee said the acquisition will help it move into new markets and achieve cost savings on a wider range of products. The companies also noted their shared roots as local, family-owned enterprises that intimately know the communities they serve.
"Together, we have an opportunity to accelerate our growth in all markets, while continuing to provide exceptional services," Brian George, president and CEO of Alex Lee, said in a statement. "W. Lee Flowers and its employees have built invaluable relationships within their local communities that we expect will only solidify as we move forward together."
W. Lee Flowers operates a 400,000-square-foot warehouse in Scranton, South Carolina that carries a full range of fresh, frozen and shelf-stable products. That facility will open up distribution for Alex Lee in South Carolina and Georgia. W. Lee Flowers also has a robust retail store presence in markets like Columbia, South Carolina and Augusta, Georgia.
Although officials didn’t touch on retail strategy, Alex Lee could refashion some W. Lee Flowers stores as Lowes Foods locations. Lowes is an innovative grocer that operates proprietary foodservice concepts like Chicken Kitchen and Sausageworks. It also has an e-commerce platform, Lowes Foods to Go, that could integrate with Flowers’ stores and distribution channels.
Alex Lee has made strategic acquisitions throughout its 88-year history. It bought the Lowes Foods chain in 1984 and purchased stores from competitors like Hannaford to expand its footprint. Lowes now counts 85 stores along with 22 fuel centers and the Just Save value brand, which operates six stores. In 2017, Alex Lee acquired Souto Foods, a distributor of Latin American and Caribbean foods based in Atlanta.
Alex Lee also announced a partnership with online grocer Farmstead earlier this month to open multiple micro-hubs in South Carolina.
The past few years have seen significant consolidation among distributors, including United Natural Foods' $2.9 billion acquisition of Supervalu last year.
Meanwhile, retail experts have noted regional grocery acquisitions will increase as industry competition forces small and mid-sized companies to either scale up or exit the business. Over the past year, SpartanNash has acquired Martin’s Super Markets, Stop & Shop purchased King Kullen Grocery Co. and Lidl acquired Best Market.
