Carr-Gottstein Foods Co.: supermarket giant stays on course.

• Author: Woodring, Jeannie
• Position: Alaska's top ranking 1990 revenue producer - The New 49ers - Cover Story

RANK: 1 1990 REVENUES: $500 MILLION EMPLOYEES: 2,815

One year ago, in October 1990, employees of Alaska's largest, most profitable grocery chain acquired the business in a leveraged buyout from the families of two long-time Alaskans who had jointly built the enterprise. Under new ownership -- but largely the same management -- Carrs Quality Centers continues to be aggressively innovative.

Yet from the public eye, nothing really changed. "We wanted this to be a transparent buyout so that our customers and associates wouldn't be affected by the sale," says John Cairns, the new president and chief executive officer. He and Mark Williams, the new executive vice president and chief operating officer, say they intend to continue the company's history of trend-setting customer service started by its previous owners, Larry Carr and Barney Gottstein, more than 40 years ago.

The firm built by Carr and Gottstein had grown to become second only to Arco Alaska in employment by private firms in the state, with 2,815 workers in 1990. Carr-Gottstein Inc. also was the largest revenue producer among Alaskan-owned, Alaska-based businesses from 1984 through 1988. In 1989, the company was unseated by Veco International Inc., whose role as general contractor for the cleanup following the Exxon Valdez oil spill catapulted it to the top.

In 1990, Carrs Quality Centers and other businesses acquired from Carr-Gottstein and now operated as Carr-Gottstein Foods Co. grossed an estimated $500 million in revenues. The business once again was the largest Alaskan-owned, Alaska-based company -- New 49er No. 1.

Outside agents had made offers to buy the grocery business before, but company founders Carr and Gottstein hoped to keep their business in the hands of Alaskans. When two Carrs executives -- Cairns, then general manager, and Williams, then vice president of operations -- tendered an offer last year, Carr and Gottstein helped make the purchase price more affordable by retaining some of the properties and leasing them to the new operators.

Financing for the buyout was secured from Leonard Green & Partners, a Los Angeles-based investment banking firm that specializes in leveraged buyouts. The Anchorage Times reported on Oct. 17 last year that the investment company's financing relied in part on a $225 million investment pool made up of contributions from three institutional investors.

The sale price, estimated at $250 to $300 million, included 16 grocery stores (13 Carrs...