CINCINNATI, OH - The retail scene seems increasingly alive lately with new strategic approaches, including a multitude of buy-outs, cuts, expansions, and investments. Amongst the more recent moves is Kroger’s decision to up the funding in its pension liability, which it recently said presents “strategic opportunities.”
The company set plan in motion to invest upwards of $1 billion in underfunded benefits plans, according to Reuters, and will issue debt to back the strategy.
A regulatory filing made earlier this week stated that the addition will not change its overall balance sheet obligations, noting that the current interest rate environment and potential changes to the U.S. tax code, among other reasons, made this an area of strategic opportunity.
The retailer said this latest investment would incur a one-time expense following the settlement, but noted that the expense would not affect its 2017 earnings forecast. Certain benefit balances of the fund could be transferred to other retirement plan options or a lump sum payout. Reuters also reported that Kroger had a total debt of $13.44 billion as of May 20.
Kroger has made several moves to shift and grow within a competitive market over the last year. Amongst these have been its acquisition of several Marsh Stores last month to expand its reach, plans for a new Michigan-based distribution center, as well as endeavors to cut costs and remain competitive in the ever-increasing price wars.
Is this latest investment just one step in the Ohio-based retailer’s plans for growth? AndNowUKnow will continue to report on this and other developing buy-side stories as detail emerge.
