<p>Safeway intends to exit the Chicago market in early 2014. The retailer currently operates 72 Dominick's stores in the region. Safeway has decided to focus its efforts in other operating areas where business is stronger, and the company has already sold four of its Dominick's locations in the greater Chicago area to New Albertsons, Inc., which operates Jewel-Osco grocery stores. During a short transition period, the stores will continue to operate under the Dominick's banner until Jewel-Osco can complete their conversion to Jewel-Osco stores. </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>News of the sale sent Safeway stock up over 6% to above $33.50 in after hours trading. Beating it’s 52-week high of $32.72 and closing price of $31.57, according to a report in Forbes.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>In another recent move, Safeway announced that it entered into an agreement to sell its Canadian operations through the sale of substantially all of the net assets of CSL to Sobeys</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>"The decision to sell Canada Safeway and to exit the Chicago market is consistent with Safeway's priority of maximizing shareholder value," said Robert Edwards, President and CEO. "These actions will allow us to focus on improving and strengthening our core grocery business," added Edwards. "We are continuing to review all of our businesses to optimize our allocation of resources, improve sales and grow operating profits."</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>This begs the question, who else is eyeing this prime real estate? </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>By exiting the market, Safeway will see a cash tax benefit of $400 million to $450 million which will be available in the short-term to partly offset the cash tax expense on the sale of the net assets of Canada Safeway, according to a press release. In the third quarter of 2013, Dominick's incurred losses before income taxes of $13.7 million and $35.2 million in the first 36 weeks of 2013. </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>Safeway stock jumped six percent yesterday in response to the announcement.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>Dominick's will be working with Jewel-Osco and the unions to ease the transition for store employees, and to facilitate continued employment for as many of them as possible.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>The decision to exit the Chicago market was reached after the end of the third quarter of 2013. Therefore, in accordance with generally accepted accounting principles, Dominick's net assets have not been classified as held for sale on the third quarter balance sheet, and its operations have not been included in discontinued operations. </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>The company expects to use the cash tax benefit and any other cash proceeds from the disposal of Dominick's properties to buy back stock and to invest in growth opportunities.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>By exiting the Chicago market, the move will also trigger a multi-employer pension withdrawal liability which is generally paid evenly over twenty years. Safeway estimates that the present value of the required quarterly cash payments is up to $375 million and that the present value of the related tax benefits is up to $145 million.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>For Safeway, the retailer's net income for the third quarter of 2013 was $65.8 million. After adjusting for the $6.1 million impairment charge, net income for the third quarter of 2013 was $71.9 million. This compares to net income of $157.0 million in the third quarter of 2012. In addition, sales and other revenue increased 1.1% from $8.5 billion in the third quarter of 2012 to $8.6 billion, primarily due to an identical-store sales (excluding fuel) increase of 1.9%, partly offset by lower fuel sales in 2013 and the disposition of Genuardi's stores in 2012.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p><a class="btn btn-sm btn-primary col-lg-12" style="white-space: normal;" href=" http://www.safeway.com/IFL/Grocery/Investors#iframetop" target="_new"> Safeway</a></p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p><a class="btn btn-sm btn-primary col-lg-12" style="white-space: normal;" href="http://www.forbes.com/sites/samanthasharf/2013/10/10/safeway-exits-chicago-as-activist-circles-will-return-cash-to-shareholders" target="_new"> Forbes</a></p><hr class="legacyRuler"><hr class="invisible minimal-padding">
