American Stores has apparently become disenchanted with California as a headquarters for its supermarket and drugstore chain and is preparing to move the operation back to Salt Lake City.
The Los Angeles Times Wednesday quoted Jonathan L. Scott, who will take over as chief executive officer from American Stores Chairman L.S. "Sam" Skaggs on Jan. 29, as saying there is a "strong possibility" that American will move back to Salt Lake City. The company moved its headquarters to Irvine, Calif., last July.An American Stores spokesman confirmed that the Scott quote was accurate but said he didn't know why management was considering a return. Asked if the move back to Salt Lake wasn't, in reality, a firm decision, he said management would only stand by the "strong possibility" statement.
The spokesman said the company was also looking at "other sites" in addition to Utah. The president of Alpha Beta Stores is moving to Dallas.
However, sources close to the company said Thursday that the return to Salt Lake was more than a strong possibility and that the decision has been made. Throughout the move, Skaggs has retained a home and office in Salt Lake City.
Industry watchers speculate that among the reasons for the return to Utah is that Skaggs is displeased that California Attorney General John Van de Kamp is trying to block American Stores' hard-fought acquisition of Lucky Stores Inc.
The state filed a lawsuit in September charging that the merger would be anti-competitive and violate federal antitrust laws. American Stores owns Alpha Beta stores in California as well as the 27-state Osco drug chain.
The lawsuit says the $2.5 billion merger, which would create the largest food retailer in California, would reduce competition in the state's retail grocery industry. After a heated takeover battle, American Stores acquired the Dublin, Calif.-based Lucky Stores last May and received federal approval for the takeover in August.
Van de Kamp said California consumers stand to have an extra $400 million added to their grocery bills as a result of the recent rash of mergers involving California supermarkets.
A hearing on a court ruling preventing completion of the merger was scheduled for Thursday in the California appellate court. The American Stores spokesman said he had no idea whether a decision in American Stores' favor would change management's mind about leaving California.
It is also speculated that Utah once again looks attractive to Skaggs because of the re-election of Gov. Norm Bangerter. Records indicate that Skaggs donated $10,000 to Bangerter's campaign on Oct. 13, and on Feb. 12 American Stores Inc. gave $5,000 to the campaign.
Sources said American Stores Co. headquarters would return to Salt Lake along with some personnel of Alpha Beta Stores Inc. and the firm's personnel department, among other operations. American Stores still owns its former headquarters building on South Temple and also facilities in the Salt Lake International Center.