L. S. Skaggs to Retire as American Stores Chief

L. S. Skaggs will retire as chairman and chief executive of American Stores Co., the nation’s largest supermarket owner, as soon as a successor is found.

The change-of-command announced Tuesday by the Irvine-based company had long been expected by company insiders. Skaggs, who recently reached American Stores’ mandatory retirement age of 65, announced several years ago that he expected to retire after he reached that age.

At an American Stores board meeting Tuesday, Executive Vice President Victor L. Lund was elected president and chief financial officer. Skaggs had held the position of president in addition to being chairman and chief executive.

An American Stores spokesman declined to comment on how long the search will take or whether the company is likely to choose someone now with the company or go outside to find Skaggs’ successor.

Industry analysts, however, speculated that one potential choice would be John M. Lillie, chairman of Lucky Stores, which was acquired for $2.5 billion by American Stores earlier this year.

As the head of Lucky, Lillie “essentially developed Lucky from a down-and-out company. He’s an excellent man and would make a great CEO,” said Edward Comeau, vice president with Oppenheimer & Co. in New York.

In fact, during American Stores’ takeover of Lucky, “American could have alluded to Lillie that he would play a greater role in the organization at some point,” Comeau suggested.

Another candidate might be Jonathan L. Scott, who is now chairman and chief executive of American’s eastern subsidiary, American Superstores, Comeau said.

A retail veteran with experience at Albertson’s and Skaggs Cos., Scott is credited by the company with having co-pioneered the development of the combination food and drug store. Even so, Comeau said, Scott’s record as a former chief executive of A&P; was mixed and “the company didn’t do all that well.”

Industry insiders agreed that Skaggs’ job will be tough to fill.

In the past 35 years, “no one individual has had as much impact on the supermarket and drug industry as Sam Skaggs,” said Jack H. Brown, chairman and president of the Stater Bros. supermarket chain. “When you think about the amount of volume of the companies that he controls, no other individual has ever had that type of retail sales dollars before.”

With American’s acquisition of Lucky, Skaggs heads the largest supermarket chain in the nation. American’s grocery sales this year should reach about $10 billion, according to Comeau.

Also on Tuesday, American Stores announced that the board of directors has expanded to 18 members from 10. Instead of two management members and eight non-management members, the board will now have six management members and 12 non-management members.