Jonathan Scott to Succeed Skaggs as American Stores’ Chief Executive

Irvine-based American Stores Co., owner of the Alpha Beta and Lucky Stores supermarket chains, said Tuesday that company Vice Chairman Jonathan L. Scott has been named to succeed L.S. (Sam) Skaggs as chief executive officer.

Meanwhile, Scott said there is a “strong possibility” that American Stores will relocate its corporate headquarters to Salt Lake City, Utah, where the company had been based until it moved to Orange County in July.

Skaggs, who recently reached the company’s mandatory retirement age of 65, will remain as chairman of the firm and continue to serve on its board for at least 4 years.

Scott, 58, said Skaggs, who is widely credited with building American from a regional drugstore operation into a 1,600-store supermarket and drug chain, will still have an active role with the company.

“He’ll certainly be the coach,” Scott said. “We’ll be the quarterback.” Scott said Skaggs will continue to have a major--although gradually declining--role in decisions involving company strategy, while the new management team headed by Scott will have operational responsibility.

The grandson of a Tennessee Baptist minister, Skaggs is known for his shrewd acquisitions and profitable asset sales. In 1950, he took over Skaggs Cos., the drug chain founded by his father. Since then, he has engineered three major acquisitions--including the 1979 purchase by Skaggs Cos. of American Stores, which gave the company its name.

Earlier this year, American Stores paid $2.5 billion for the Lucky Stores chain. The merger of Lucky with America’s Alpha Beta stores would create the nation’s largest supermarket chain, with 567 stores. The consolidation has been held up since September by a court ruling.

Skaggs’ successor, Scott, is a close friend and an Idaho native who joined Boise-based Albertson’s 33 years ago and later became its chief executive. He was then wooed away by the company that owns the A&P; chain.

In picking Scott, American Stores has turned to a seasoned supermarket executive who went to work there in early 1987 as chairman and chief executive of the firm’s eastern subsidiary, American Superstores.

The elevation of Scott ends an industry guessing game over who would succeed Skaggs.

Industry insiders had targeted the front-runners as Scott and John M. Lillie, the 51-year-old chairman of Lucky Stores.

In an interview, Scott praised Lillie’s management expertise but dodged questions about whether he was a serious contender for Skaggs’ job.

Scott’s appointment was one of several changes announced in a major management reshuffling by the parent company.

Victor L. Lund, 41, will continue as vice chairman and chief financial officer and also was elected as chief administrative officer. Alan D. Stewart was elected as American Stores’ president and chief operating officer, and also as a director of the parent firm.

The changes are part of the company’s effort to ensure a smooth transition for the senior management team that will assume Skaggs’ responsibilities as he moves to a less active role.

The company, meanwhile, would consider a “reasonable” settlement to end its battle with state Atty. Gen. John K. Van de Kamp over the merger of its Alpha Beta and Lucky Stores chains, its executives said.

At the same time, Scott, Lund and Stewart emphasized that American Stores has decided to keep in place its “holding company” concept.

Two years ago, American decided to create a small headquarters staff with three divisions: the Alpha Beta subsidiary that operates Alpha Beta stores in California, Skaggs Alpha Betas and Buttrey Food Stores in the Northwest. The second, American Superstores, oversees three supermarket chains in the East and Midwest--Acme Markets, Jewel Food Stores and Star Markets. A third, Osco Drug, operates drugstores across the country.

At about the same time, American had indicated that there was the possibility of public stock offerings, divestitures or spinoffs of assets of one or more organizations.

Now, Scott said Tuesday, “we think the way to continue” is as a holding company “rather than the spinoffs and restructuring we were thinking about a few years ago.”

What that means, he said, is that financial and administrative matters, including financing, will be decided by American’s management team. But marketing, distribution, merchandising and overseeing day-to-day operations will remain under the control of regional management teams.

The reasoning, Scott said, is that the holding company structure “allows us to fund those particular companies in the most efficient way.”

The executives also stressed that the holding company structure will be beneficial to American in its policy of expanding through internal growth. Florida--where American will have six stores within a year--and California are two areas that American plans to focus on by pumping in capital.

The growth translates to expected sales of more than $20 billion for fiscal year 1989, which ends Jan. 31, 1990, Lund said. American’s sales are expected to total more than $18 billion this year.