Esselunga, the disputed legacy of the Italian retail giant

Group sale suspended after owner Bernardo Caprotti's death. His second wife and their daughter are now in charge
Esselunga, the disputed legacy of the Italian retail giant

The death of Bernardo Caprotti (90 years old, on September 30th), Esselunga group founder and owner, has opened up a new chapter for this Italian supermarket chain empire. His second wife Giuliana Albera and their daughter Marina Sylvia (Caprotti’s third and younger one) will be in charge. Moreover, Esselunga group is no longer for sale, despite the task recently given to Citigroup to find a potential purchaser. The first Bernardo Caprotti’s will provisions have been read on October 5th in Milan. The will states clearly who is to be the new Esselunga owner. The property of Supermarkets Italiani holding – of which Esselunga is the most important subsidiary company – will be divided among Caprotti’s three sons and his second wife. 66,7% of the shares will be allocated to Giuliana Albera and Marina Sylvia, the rest will be property of the first son Giuseppe Caprotti and his sister Violetta (16,7% for each one). A smaller but considerable part of the inheritance (half of Caprotti’s personal savings) will go to Germana Chiodi, Caprotti’s lifelong personal secretary and collaborator.

AN ATTRACTIVE COMPANY – In the last few lines of his will, Bernardo Caprotti himself says that if Esselunga will be “Italian, independent, vulnerable to attack, it may become a coop. But this can never happen”. It would be better to look abroad for a purchaser, or a partner. “An international player like Ahold (the dutch large-scale retail chain giant, which is not interested in Esselunga at the moment) would be ideal, not Mercadona”. Two weeks before his death, Bernardo Caprotti instructed the American multinational investment banking corporation Citigroup to select buyout offers for a share of Supermarket Italiani – Esselunga. This decision could have been due to fear of “attacks” by competitors, or worries about arguments on his legacy. Esselunga annual reports are outstanding: €290 million corporate profits in 2015 (+37% on 2014) compared to a turnover of €7,312 billion (+4,3% on 2014). Many different companies – both financial groups and large-scale retail chains – seemed interested in purchasing Esselunga. It is said that last August Blackstone private equity fund proposed Mr. Caprotti to purchase 60% Esselunga share, with an option for the remaining 40%. British fund Cvc seemed to have showed the same expression of interest. Last summer, some competitors such as the American Wal-Mart and the French Carrefour seemed also interested in Esselunga, but there was no deal in the end. After Mr. Caprotti’s death, everyone is waiting for the new governance first moves. Fight over the inheritance, permitting.

A PIECE OF ITALIAN RETAIL HISTORY – Esselunga Spa is a Supermarkets Italiani subsidiary company. It represents 9% of retail sales in Italy’s supermarkets, with 140 shops placed in Lombardy, Tuscany, Piedmont, Emilia-Romagna, Veneto and Liguria. The Supermarkets Italiani Spa company – the older Italian supermarket’s chain – was founded in the mid-1950s by businessman Nelson Rockefeller together with some associates like Bernardo Caprotti, who started off with a share of 18%. In 1994, Esselunga was the first ever Italian supermarket chain to introduce customer loyalty programmes (Fidaty card) and private label’s products. In 2004, it started offering customers organic food and e-commerce purchases.

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