ANCHORAGE, Alaska -- After discontinuing two businesses last year that were not producing acceptable returns, Carr Gottstein Foods here said it plans to focus its energies on growing sales by developing existing operations and seeking additional store locations.
export company.
"As part of our 1997 commitment to review the performance of all our assets, we recognized that those business areas were not producing acceptable returns and that our resources would be better utilized expanding our retail operations," Hayward said in the report.
"We will remain focused on growing sales by continuing to develop our existing operations while aggressively seeking opportunities for additional store locations, either through acquisition or new development," he said.
Carrs said in the report it acquired the assets in March of Market Basket, a three-store operator who closed two units in Fairbanks and sold the third, in North Pole, Alaska -- 14 miles east of Fairbanks -- to Carrs; the deal also included additional real estate in Fairbanks that will become the site of Carrs' second Fairbanks store at an unspecified future date, the report said. "This transaction will give us additional synergies and a stronger position in the state's second largest city," Hayward pointed out.
After completing one store acquisition and three remodelings last year, the company anticipates five remodelings this year, he added.
The report said capital expenditures this year will fall between $7 million and $12 million. "Due to the company's substantial investment in the store base since 1990 -- 24 remodelings, eight store expansions and six new stores -- the company does not expect that significant capital improvements will be necessary in the foreseeable future," the report explained.
Although sales for fiscal 1997 fell 3.8% to $589.3 million, "we achieved more profitable sales during the year," Hayward said in the report.
He said he attributed the improvement to upgrades in the chain's private label program; the signing of new three-year agreements with the Teamsters Union, and settlement of other contracts "that will prove beneficial to our cost structure going forward."
He said the company was able to improve operating cash flow and effectively manage working capital last year, which enabled it to reduce debt by more than $14 million. "Debt reduction will remain a high priority for us this coming year," Hayward said in the report. "We believe we will see continued benefits from our cost control initiatives."
