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D&W STARTS RECEIVING DELIVERIES FROM SPARTAN

GRAND RAPIDS, Mich. - It will be more than a month before Spartan Stores here completes its purchase of D&W Food Centers, but some D&W stores are already receiving deliveries from its new corporate parent.Closing the deal with D&W and integrating its 20 stores into the retail network is the top priority at Spartan, which announced the purchase of the Grand Rapids-based independent late last year,

GRAND RAPIDS, Mich. - It will be more than a month before Spartan Stores here completes its purchase of D&W Food Centers, but some D&W stores are already receiving deliveries from its new corporate parent.

Closing the deal with D&W and integrating its 20 stores into the retail network is the top priority at Spartan, which announced the purchase of the Grand Rapids-based independent late last year, Craig Sturken, Spartan's chairman, president and chief executive officer, said in a conference call last week. D&W, which previously bought groceries from Supervalu, has begun receiving Spartan's private-label goods.

Reintroducing Spartan-branded product is among the "intriguing growth opportunities" Spartan expects to realize as it takes over D&W, Sturken told analysts. The deal, which is expected to close by early April, will also help Spartan improve efficiency, gain distribution synergies and provide opportunities to add customer conveniences such as fuel centers to certain D&W stores, he added.

The outlook for acquiring other Michigan independents was "encouraging," Sturken added. He said some of Spartan's regional competitors could exit in as soon as two to six months due to an influx of supercenter competition.

During the fiscal third quarter that ended Dec. 31, net income of $3.4 million was down 25.8% from the same period a year ago, when Spartan received a $2.4 million after-tax benefit. Excluding unusual items, including a $500,000 after-tax gain this year, profits from continuing operations of $4.8 million increased on a year-over-year basis.

Sales of $642.3 million in the quarter increased 2.9%, with distribution sales gaining 8.2% to $375 million and retail sales falling 3.9% to $267.3 million. Comparable-store sales fell 1%.

The distribution segment gained as the result of new customers, while retail performance slipped against competitive store openings, the sale of a retail joint venture and the closure of two pharmacies.

TAGS: Supervalu