Spokane Journal of Business

Tidyman’s to expand its reach

It looks to add supermarkets in Oregon, the Dakotas, Colorado, Utah

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During the past year, whats now known as Tidymans LLC digested a merger that nearly doubled the number of stores it operates to 23, is expected to boost its annual sales to more than $300 million, and has expanded its territory.

But the 31-year-old Spokane-based grocery chain isnt done, yet.

This year, Tidymans plans to pursue additional acquisitions; expand its territory into Oregon, Colorado, Utah, and the Dakotas; work to replace an aging Spokane store; and sell its corporate office building in Greenacres so it can move into leased space elsewhere in the Spokane area.

If youre not growing in this industry, youre lining up to be purchased, says John Maxwell, the companys president and CEO, adding that Tidymans is ready to become a fairly major regional player.

After five years of what Maxwell describes as stagnant growth, Tidymans expects to see its sales this year soar by about 80 percent to more than $300 million and its earning to increase at least three-fold, due to the merger of its retail stores with the retail store network of Supervalu Inc., a Minnesota-based grocery distributor, and an acquisition of two stores in Casper, Wyo.

Like many of its competitors, Tidymans has tried to grow both through acquisitions and by building new stores. In the merger, which closed in October, the grocery chain effectively obtained eight County Market stores in Montana and Dissmores IGA store in Pullman, Wash.bringing its total number of stores at that time to 21. Prior to the merger, Tidymans operated 12 stores: six in Spokane, four in North Idaho, and one each in Kalispell and Missoula, Mont.

County Market employees who are union members, are at least 21 years of age, and have one year of experience can choose whether to join the ESOP or continue in a union pension program. Non-union members automatically become ESOP members when they meet the age and experience criteria.

Tidymans LLC now manages and provides support services to all Tidymans and County Market stores, as well as to the IGA store in Pullman.

Then, in November, Tidymans LLC bought two former Buttreys grocery stores in Casper, Wyo. Those two stores reopened this month as County Markets, after Tidymans spent about $2 million to renovate them.

As a result of the Supervalu merger and the acquisition of the two Buttreys stores, Tidymans employment nearly doubled to 2,397, from 1,213 at the end of 1997.

Now, says Maxwell, Tidymans would like to expand further by increasing the geographical area it currently serves, which includes Eastern Washington, North Idaho, Montana, and Wyoming. The chain has its eye on eastern Oregon, the western portions of North and South Dakota, western Colorado, and Utah. He doesnt know how many stores it plans to acquire or open in those areas, but says that those areas have been targeted because they can be served by nearby Supervalu warehouses. In addition to being its partner in the retail-store network, Supervalu also is Tidymans exclusive supplier.

Tidymans likely will be targeting acquisitions in rural communities within those new areas because theres less competition in the rural areas than in larger metropolitan areas, Maxwell says. Most metropolitan areas have developed tremendous competition, especially from players such as Albertsons Inc., Safeway Stores Inc., and Fred Meyer Inc., he says. Each of those big chains have spent the last few years growing their operations and gobbling up other grocers.

In anticipation of its own planned growth, Tidymans has been looking for ways to trim expenses and become more efficient. Maxwell says the company has renegotiated its workers compensation rates for its stores in Idaho, renegotiated its liability insurance rates, and revamped some of its supply agreements.

Now the chain is working to get all of its recently acquired stores tied into the companys computer system. That way accounting and data processing services can be handled from the corporate office here, cutting costs further.

Once that consolidation has been completed in August or September, Maxwell says the company will be ready to seek additional acquisitions.

Our balance sheets are in good shape. We have almost no debt right now, and weve negotiated a new line of credit with the bank. So, were ready to expand and grow the business, he says.

Tidymans would prefer to acquire well-established, well-run stores rather than build its own, because acquisitions are a less-expensive form of growth, but the company isnt opposed to building, Maxwell says.

Tidymans hasnt built and opened a new store since 1997when it opened its store near the southwest corner of U.S. 195 and Cheney-Spokane Road. Maxwell says thats because it takes a total of about three years to locate a site, build a store, and then open it. Plus, a company can expect a new store to lose money for as many as three years after it opens.

We just couldnt go out and build a number of stores with that kind of risk, Maxwell says. Now, with the line of credit we have, we could take on two or three new stores or just modernize the stores we have that need it.

Tidymans already is working on plans to replace its aging store here at 6401 N. Cedar. Maxwell doesnt know when construction of a replacement store would begin, but says that Tidymans hopes to keep the Cedar store open while the company builds a new store on the same site. To do that, though, Tidymans will need to buy more property there, he says.

Meanwhile, Tidymans also has put its corporate office up for sale. Maxwell says the company has outgrown the building, at 17515 E. Appleway, and now has the opportunity to lease space in Supervalus sprawling warehouse and office complex here at 11016 E. Montgomery.

We own this place free and clear. So, Id rather sell it and invest the money on a new grocery store, Maxwell says.

Despite its aggressive growth plans, Tidymans is a little leery of the continued competition it will face this year. Maxwell says that as the nations largest chains continue to acquire other companies, synergies are produced that are hard to stop.

The larger companies have greater buying power than a company the size of Tidymans, which makes it harder for a smaller concern to compete.

Still, Maxwell says he remains cautiously optimistic.

By remaining independent, staying smaller, and retaining our local ownership, I expect that well be able to react quicker to the needs of the customer and the community, Maxwell says. We also really support the communities we serve, which I think helps to give us an edge.

  • Lisa Harrell

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