Supermarket King Moves On
LOS ANGELES (AP) _ Rising from boxboy to magnate, supermarket dealmaker Ron Burkle has reached the top of the food chain in the worlds of politics and high finance.
The people that Burkle counts as friends, mentors and partners include some of the financial world’s heaviest hitters: Warren Buffet, Charles Munger, Stanley Druckenmiller and George Soros, to name a few.
In politics, Burkle is known for star-studded fund-raisers held at Greenacres, his 40-room Beverly Hills mansion.
Now, after landing his biggest deal yet _ the $8 billion sale last week of Fred Meyer Inc. to Kroger Corp. _ Burkle appears to be moving away from the supermarket dealmaking that has been his trademark for more than a decade.
Earlier this year he announced plans to sell Chicago-based Dominick’s Finer Foods, his other major supermarket holding, to Safeway for $1.2 billion.
The Fred Meyer sale was ``probably our last supermarket deal,″ Burkle said in an interview.
``I wouldn’t rule it out. If there’s an interesting thing internationally or a specific thing supermarket-wise, we’d look at it as an investment. But I’ve done the best one I’m going to do, to that extent that’s probably the end of it,″ he said.
Since 1987, Burkle’s privately held Yucaipa Cos. has made more than a dozen acquisitions worth more than $14 billion. Those transactions gave Yucaipa Cos. the controlling interests in major food store chains in California, Washington, Oregon, Arizona and Utah.
``Ron is just a very smart dealmaker,″ said Ted Virtue, president of BT Alex. Brown, the New York brokerage that has been an investor or adviser in several of Burkle’s deals.
``To the best of my knowledge he hasn’t had a bad deal. He is a proven winner and Wall Street and others tend to circle around people like that.″
Burkle’s climb began more than 30 years ago in suburban Claremont, where at age 5 he began doing odd jobs at the Stater Bros. supermarket his father managed. At 13 he got a union card and worked after school mopping floors and bagging groceries.
What he learned as a youngster has been a key to his success as an adult, Burkle said.
``I probably learned almost everything you could about work ethic and how you treat customers,″ he explained.
``I was a pretty shy kid. I’m not sure I’ve come out of that entirely. It forced you to learn how to greet people and deal with the public. It was really work ethic and customers first.″
In 1973, he dropped out of college to return to Stater Bros., and eventually joined the executive ranks. In 1981, Burkle and his father made a bid to buy the chain. Despite the backing of Warren Buffet’s Berkshire Hathaway investment group, their offer was rejected and father and son were both fired.
``I didn’t have any depth then. I didn’t know how deals worked,″ he said.
For several years Burkle made money by focusing on private investments in stocks, commodities and currencies. In 1986, he formed Yucaipa.
Among his new interests is an Internet venture he is working on with former Disney Online president Richard Wolpert. Burkle also is among a celebrity-studded group backing former Hollywood superagent Michael Ovitz’s bid to build a new stadium in suburban Carson and bring an NFL expansion team to Southern California.
Burkle said his political connections have proven useful in his business dealings only once.
While negotiating to buy Ralphs _ another West Coast grocery retailer _ Burkle felt he wasn’t being taken seriously by Byron Allumbaugh, Ralphs’ chairman and chief executive. That seemed to change after Burkle introduced Allumbaugh to President Clinton.
``I had known him since I was in my 20s,″ Burkle said. ``I don’t think he looked at me as being old enough. ... He saw me as a nice young boy.″ After taking him along on two visits with Clinton, ``he actually, I think, saw me in a different light. I think he saw me for the first time as an adult.″
Working quietly, out of the limelight, is Burkle’s preference. He plans to keep busy with low-profile ventures, including investments in the stock market.
``My guess is unless we do something public again, no one will pay any attention to us again, which is good,″ he said.