Klaff Realty, Shopping For Acquisitions, Considers Jewel-Osco

A local buyout firm with a history of investing in supermarket companies is considering a bid for the Jewel-Osco grocery chain or other pieces of its embattled parent, SuperValu Inc.

Klaff Realty LP's interest was confirmed by real estate sources who deal with the firm. Hersch Klaff, the managing partner who founded the business in 1982, did not return phone calls; Patrick Peery, co-director of real estate strategies and acquisitions, declines to comment. Mr. Klaff is remembered by many Chicagoans as an unsuccessful bidder for the Cubs four years ago.

If Klaff does make a bid, it could be competing against the former owner of Jewel's archrival, Dominick's Finer Foods. Grocery industry analysts speculate that Los Angeles-based Yucaipa Cos., which owned Dominick's between 1995 and 1998, may also make an offer for all or part of SuperValu. In the past two years, Yucaipa has taken major positions in such distressed retailers as Great Atlantic & Pacific Tea Co. and Barneys New York. Yucaipa did not return an email seeking comment.

Eden Prairie, Minn.-based SuperValu announced last month that it was reviewing all strategic options in the wake of a 45 percent fall-off in first-quarter profits. Its stock price has nose-dived 56 percent to $2.34 on Friday from $5.29 on July 11.

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