Arden considers selling Gelson's Markets 
Arden Group says it is exploring "strategic alternatives," including a sale, for Gelson's Markets. The 16-store chain in Southern California is known for high-end products, ritzy locations and celebrity clients. "The problem for a lot of these companies is that they're going up against Whole Foods [Market], where scale is a big competitive advantage they have lock, stock and barrel," said Jason Moser, an analyst at The Motley Fool.

A local observer told SN the chain has turned down potential offers from buyers in the past. "But with companies like Fairway, Fresh Market and Sprouts doing public offerings to take advantage of all the interest in alternative formats over traditional grocery stores and with the pending sale of Harris Teeter, it shows upscale markets can demand a high price, and all of that could be a catalyst for Gelson's decision to explore alternatives and to think maybe the time is right to formulate an exit strategy at a good price."

Arden said it has retained Moelis & Company, a New York-based investment firm with local offices, as its financial adviser to assist in the review process.

"The company has not made a decision to pursue any specific strategic transaction or any other strategic alternative, and there is no defined timeline for this strategic review," the company said. "There can be no assurance the review .... will result in the consummation of any transactions."

Arden said it was declining further comment until its board of directors determines that further disclosure is appropriate or required.

Arden operates 16 Gelson's Markets in Southern California, with a 17th store scheduled to open in Long Beach, Calif., later this year. The Gelson's operation, founded in 1951 by brother Eugene and Bernard Gelson, was acquired by Arden-Mayfair in 1964, when it had three stores. At the time Mayfair Markets was one of the major chains on the West Coast, with approximately 250 stores, which Mayfair sold or closed over the years and ultimately converted a handful of its remaining stores to the Gelson's banner.

For the year that ended last December, Gelson's sales were $430 million.

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