Some epics end with a grand reconciliation — Odysseus comes home to Penelope and all is right with the world. The long, lurid story of Market Basket is not that kind of epic. The family remains divided, but the company itself is now freed from that bitter history.
Just this morning, the much-beloved former president Arthur T. inked a deal to buy the company from his cousin and long-time rival, Arthur S. The agreement ends a summer-long standoff between workers and management and promises a new beginning for Market Basket.
Hold on. What’s all this about?
If you don’t have time for a fuller account, here’s the short, short version.
Arthur T. Demoulas and his cousin Arthur S. Demoulas are rival grandsons of the company’s late founder. Years ago, Arthur T.’s side of the family defrauded Arthur S.’s side and a ’90s-era lawsuit gave Arthur S. control of the company. But when he forced his cousin out earlier this summer, employees organized a walkout. That handed Arthur S. a very difficult choice: Give control back to Arthur T. or watch the family company slowly implode.
How was the standoff resolved?
Getting to a resolution was no easy feat. It required months of negotiations and the intervention of two sitting governors — Deval Patrick of Massachusetts and Maggie Hassan of New Hampshire. But eventually Arthur S. and his bloc of supporters agreed to sell their shares to Arthur T. for $1.5 billion.
That’s obviously a lot of money. If you earned one dollar every second, you’d have $600,000 at the end of just one week, but it would take you 48 years to amass $1.5 billion. Having said that, the company itself has about $4.6 billion in annual revenue, and a quick check of the numbers suggests that the $1.5 billion price tag is more or less in line with the company’s earnings and long-term potential.
Who’s the big winner?
As with any effective compromise, just about every group found a way to win here.
• Arthur S. may no longer control the company, but he got a big, big payout. He can take that money and do whatever he wants with it. By all accounts, he is a very private man, and this agreement allows him to walk away from the public acrimony that has been such a big part of Market Basket’s history.
• Arthur T. gets the company he was born to run (literally). This summer’s struggle has shown that he has a large, loyal workforce and passionate customers, both useful assets for a successful business.
• Boston Globe columnist Tom Keane has made the argument that the employees are the biggest winners in all this. Their coordinated activities forced the situation to a head, and with Arthur T. now back in charge they’ve got the leader they wanted, a leader with a record of paying good wages, offering strong benefits, and generally treating employees like partners.
• Loyal Market Basket shoppers regularly tout the rare combination of high-quality food and low prices. They can now stop looking elsewhere for their groceries.
Is there cause for concern?
This summer’s fight over the future of Market Basket has been very public. Not only has the employee walkout cost the company tens of millions of dollars, but it has had an uncertain impact on the company’s brand.
Even though the deal is now final, store shelves are still empty. And given that the amount of meat and produce needed is measured in tons, it will take some days to get everything in order for shoppers. Only then will we learn whether the scandal has irrevocably damaged the company’s reputation or whether the display of employee solidarity will increase customer loyalty.
On the financial side, too, there are risks. Arthur T. is relying on large loans to cover the $1.5 billion buyout, which means he’s going to be making big loan repayments for the foreseeable future. That could squeeze company finances, forcing a rise in prices or cuts to employee benefits.
Is this really the end?
Rivalry, bitterness, and fisticuffs have been so much a part of the Market Basket story that it can be hard even to imagine the company free from family strife. But Arthur T.’s buyout does seem to resolve the long family struggle. It takes the company out of the contested grip of two competing factions and leaves it in the hands of just one side of the family tree, rooted by Arthur T.
This isn’t to say that strife couldn’t erupt again in the future. But even if this isn’t the definitive end of the Market Basket saga, it does seem like the beginning of a new chapter. Call it “Market Basket Reunified: the Arthur T. years.”