GLG News Analyses of the following article:
New Safeway Business Takes Root: As Supermarket Profit Growth Slows, Appetite for Gift Cards Grows
Published at: online.wsj.com
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Grocer Safeway has incubated a gift-card-distribution pioneer and gem of a business
December 13, 2007
Blackhawk Network is the gem within Safeway. It’s well established within the still adolescent prepaid-card-distribution industry, enjoys a network effect, and because of better operating margins and growth prospects deserves to command a much richer valuation multiple than its grocery parent. If however the market doesn’t give Safeway due credit for Blackhawk, CEO Steve Burd should spin it out.
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