Fiesta Stores Sold

[brucesw]

http://blog.chron.com/primeproperty/2015/04/fiesta-sold-to-d-c-based-acon/#32549101=0

 

The family recently sold Grocers Supply so I guess this was inevitable.  Anybody know anything about the buyers or new management?

[IronTiger]

Private investment firm, so things doesn't seem like they'll change from a homogenization standpoint. Kinda lame that its being owned out of state now, and the last big supermarket to be considered "local". Randalls will go local management next month though from what I've heard, but its still controlled by a large supermarket.

[mkultra25]

Private investment firm, so things doesn't seem like they'll change from a homogenization standpoint. Kinda lame that its being owned out of state now, and the last big supermarket to be considered "local". 

 

They'll likely just follow the time-honored private equity playbook - initially make soothing noises about their new acquisition, followed in short order by brutal cost-cutting and asset stripping, then execution of an exit strategy as soon as they've milked all the value out of their assets. For once there was actually a comment worth reading on the Chron piece, the one suggesting that Fiesta corporate employees had better start updating their resumes. 

[IronTiger]

They'll likely just follow the time-honored private equity playbook - initially make soothing noises about their new acquisition, followed in short order by brutal cost-cutting and asset stripping, then execution of an exit strategy as soon as they've milked all the value out of their assets. For once there was actually a comment worth reading on the Chron piece, the one suggesting that Fiesta corporate employees had better start updating their resumes.

The fact that they installed a new president was troublesome.

[IronTiger]

OK, but seriously though--in retail, when has this "the time-honored private equity playbook" actually been true, except for (notoriously) Mervyn's, which was an underperforming asset to begin with? I mean, Kmart/Sears have been this (but even in 2004, neither was really going anywhere) and Albertsons (which was brutalized, but the company was losing money and they ended up turning it into a really big company).

NRDC Equity Partners if I recall correctly, turned Lord & Taylor around so that they opened more stores instead of closing them.

[mkultra25]

We shall see. I hope I'm wrong. As much as Fiesta gets bashed by those who can't abide any grocery store that's not a brand-new HEB or a Signature Kroger, it's nevertheless been a unique and important part of the community for a lot of people. The fact that it will no longer be locally-owned and operated by owners whose core expertise was in both wholesale and retail grocery operations, but rather by financiers based out of state, doesn't fill me with confidence regarding its future.

[brucesw]

A follow-up article on the new owners and management.

 

Minyard was a Dallas chain; Fiesta bought some of their stores a few years ago.

 

I'm hoping they grow the chain instead of tear it into pieces.

[IronTiger]

We shall see. I hope I'm wrong. As much as Fiesta gets bashed by those who can't abide any grocery store that's not a brand-new HEB or a Signature Kroger, it's nevertheless been a unique and important part of the community for a lot of people.

Well, there will always be grocery store snobs. That's never gonna change.

[plumber2]

Well, there will always be grocery store snobs. That's never gonna change.

 

And there will always be someone like me that will drive by an HEB or Signature Kroger to an Arlan's of Feista. (That is as long is there are those choices still to be had).

 

[august948]

We shall see. I hope I'm wrong. As much as Fiesta gets bashed by those who can't abide any grocery store that's not a brand-new HEB or a Signature Kroger, it's nevertheless been a unique and important part of the community for a lot of people. The fact that it will no longer be locally-owned and operated by owners whose core expertise was in both wholesale and retail grocery operations, but rather by financiers based out of state, doesn't fill me with confidence regarding its future.

I don't see Fiesta leaving it's niche. If they do, they'll never survive. Not much value in a bit player mainstream grocer. It'd be my guess that they clean up whatever they can and sell to a larger chain looking to expand in the Hispanic market.

[mkultra25]

I don't see Fiesta leaving it's niche. If they do, they'll never survive. Not much value in a bit player mainstream grocer.

 

Yep. Exhibit A, from the Chron piece linked above:

 

 

One of Fiesta's newer stores was a recent casualty of the local cutthroat grocery industry.

Last year, the company closed a store in Sugar Land it had open less than one year. The location had offerings such as in-store yogurt and coffee shops to appeal to a wider customer base.

 

When that store opened, I remember thinking that there was no way it would last. Fiesta's niche is not in Sugar Land, and trying to go upscale with "yogurt and coffee shops" reminded me of nothing so much as JCI's effort to refocus their menu more on things like "chef-driven" hot dogs (although the jury's still out on how successful, or not, that strategy will wind up being). At least the Sugar Land store was an experiment that likely didn't cost nearly as much as if they'd opened a new store - it was a Gerland's before it was converted to a Fiesta, and at the time Gerland's and Fiesta were both owned by the Levit family.

[IronTiger]

Yep. Exhibit A, from the Chron piece linked above:

 

 

When that store opened, I remember thinking that there was no way it would last. Fiesta's niche is not in Sugar Land, and trying to go upscale with "yogurt and coffee shops" reminded me of nothing so much as JCI's effort to refocus their menu more on things like "chef-driven" hot dogs (although the jury's still out on how successful, or not, that strategy will wind up being). At least the Sugar Land store was an experiment that likely didn't cost nearly as much as if they'd opened a new store - it was a Gerland's before it was converted to a Fiesta, and at the time Gerland's and Fiesta were both owned by the Levit family.

Well, grocery stores are a bit of a hobby of mine, and I do remember the Fiesta Market Place, but Fiesta's first attempt to the suburbs in the early 1990s/late 1980s wasn't exactly a success either. The Webster Fiesta failed because of the gardens were an enormous financial drain the garden was, the Katy Fiesta stayed up until around 2008, and while it was a supposedly successful store, they left due to the parking dispute (which obviously wasn't a problem for 99 Ranch Market).

The Sugar Land Fiesta could've failed due to the rent on the place (a favorite theory of mine), but the "Market Place" was small and more importantly lacked a lot of the things Fiesta was famous for, international foods. The c. 1990 experiments had them in addition to more mainstream groceries, and they were successful for a while, but it wasn't. Meanwhile, about that time, a Fiesta "Fresh Market" opened in Conroe, which was small (sat on a 360 x 330 sq. ft. city block) but had the international foods and seems to be a success.

I don't know...if Fiesta wanted to break into the mainstream, the Sugar Land store was the wrong place, the wrong time, and the wrong design, but not saying it can't be done.

[mkultra25]

Well, grocery stores are a bit of a hobby of mine, and I do remember the Fiesta Market Place, but Fiesta's first attempt to the suburbs in the early 1990s/late 1980s wasn't exactly a success either. The Webster Fiesta failed because of the gardens were an enormous financial drain the garden was, the Katy Fiesta stayed up until around 2008, and while it was a supposedly successful store, they left due to the parking dispute (which obviously wasn't a problem for 99 Ranch Market).

The Sugar Land Fiesta could've failed due to the rent on the place (a favorite theory of mine), but the "Market Place" was small and more importantly lacked a lot of the things Fiesta was famous for, international foods. The c. 1990 experiments had them in addition to more mainstream groceries, and they were successful for a while, but it wasn't. Meanwhile, about that time, a Fiesta "Fresh Market" opened in Conroe, which was small (sat on a 360 x 330 sq. ft. city block) but had the international foods and seems to be a success.

I don't know...if Fiesta wanted to break into the mainstream, the Sugar Land store was the wrong place, the wrong time, and the wrong design, but not saying it can't be done.

 

Given that 99 Ranch Market has done well in the former Fiesta location on I-10, I've wondered if Fiesta significantly overestimated how much of an impact the parking issue would have, or if they just used it as a convenient excuse to shut the store down. It certainly seemed to be a successful store while it was open. 

 

I agree that the Sugar Land store had all of the strikes against it that you listed. When it opened, I remember asking several co-workers who lived in Sugar Land about it (at the time our office was nearby). None of them were familiar with Fiesta at all, and weren't even curious enough about it to pay it a visit. 

[august948]

Yep. Exhibit A, from the Chron piece linked above:

 

 

When that store opened, I remember thinking that there was no way it would last. Fiesta's niche is not in Sugar Land, and trying to go upscale with "yogurt and coffee shops" reminded me of nothing so much as JCI's effort to refocus their menu more on things like "chef-driven" hot dogs (although the jury's still out on how successful, or not, that strategy will wind up being). At least the Sugar Land store was an experiment that likely didn't cost nearly as much as if they'd opened a new store - it was a Gerland's before it was converted to a Fiesta, and at the time Gerland's and Fiesta were both owned by the Levit family.

 

They did the yogurt and coffee shop thing at the one near me at Westheimer and Dairy Ashford, but it was gone within 6 months.  Replaced by a florist counter.  Other than that the store has been doing ok so far, judging from the traffic in and out.  Not as good traffic as the one at Bellaire and Hwy 6, but decent.

 

[Firebird65]

... JCI's effort to refocus their menu more on things like "chef-driven" hot dogs...

 

What the #### is a "chef-driven" hot dog? 

 

Man, some folks just want to make things more complicated (and probably more expensive, as well) than it needs to be. 

[IronTiger]

They did the yogurt and coffee shop thing at the one near me at Westheimer and Dairy Ashford, but it was gone within 6 months. Replaced by a florist counter. Other than that the store has been doing ok so far, judging from the traffic in and out. Not as good traffic as the one at Bellaire and Hwy 6, but decent.

Floral departments are pretty standard, more than coffee stands are.

[mkultra25]

What the #### is a "chef-driven" hot dog? 

 

Man, some folks just want to make things more complicated (and probably more expensive, as well) than it needs to be. 

 

http://www.houstonpress.com/restaurants/james-coney-island-unveils-line-of-chef-designed-hot-dogs-on-june-1-6430110

 

If you haven't visited a JCI in a while, you may have to read the menu closely - as an example, the old standby Combo #1 has been rebranded as the "Walker St. Combo", although I note that many of the employees still refer to it as a #1 when you order one.

[SKIPPER]

On 5/3/2015 at 3:35 PM, mkultra25 said:

 

Yep. Exhibit A, from the Chron piece linked above:

 

 

When that store opened, I remember thinking that there was no way it would last. Fiesta's niche is not in Sugar Land, and trying to go upscale with "yogurt and coffee shops" reminded me of nothing so much as JCI's effort to refocus their menu more on things like "chef-driven" hot dogs (although the jury's still out on how successful, or not, that strategy will wind up being). At least the Sugar Land store was an experiment that likely didn't cost nearly as much as if they'd opened a new store - it was a Gerland's before it was converted to a Fiesta, and at the time Gerland's and Fiesta were both owned by the Levit family.

Gerlands never made a profit from that location.