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GRAND UNION EXPECTS A STRONG FISCAL YEAR 2000

WAYNE, N.J. -- Grand Union Co. here said last week its operating performance in the 53-week year and 13-week fourth quarter ended April 3 has set the stage for a stronger operation in fiscal 2000 and beyond.es dropped 0.4% for the year, while net income was $114.4 million after an extraordinary item of $259 million related to extinguishment of debt in the company's reorganization.For the fourth quarter

WAYNE, N.J. -- Grand Union Co. here said last week its operating performance in the 53-week year and 13-week fourth quarter ended April 3 has set the stage for a stronger operation in fiscal 2000 and beyond.

es dropped 0.4% for the year, while net income was $114.4 million after an extraordinary item of $259 million related to extinguishment of debt in the company's reorganization.

For the fourth quarter operating cash flow rose 41% to $30.1 million, or 5.5% of sales, up from 4.2% a year ago. Sales for the quarter jumped 8.2% to $547.2 million and same-store sales rose 0.7%, while the company reported a net loss of $31.4 million.

The company said comps for the fourth quarter were positive in its metro New York and New Jersey operating divisions, while sales in the northern division "have shown terrific progress," J. Wayne Harris, chairman, president and chief executive officer, told securities analysts in a conference call. "While they're not yet positive, they are almost positive."

Asked how Grand Union has maintained positive comps in the New York-New Jersey area despite intense competition, Gary Philbin, the chain's chief merchandising officer, said, "We're making sure our ads are competitive and focusing on performance with our vendors. Performance was a key issue before the company's reorganization, but we've been able to prove ourselves through performance to gain margins and increase allowances, and we've keyed our top categories and top vendors to drive sales week to week."

Jeff Freimark, chief financial officer, told analysts the company expects to install and implement a host of technology programs this year, including direct store delivery in all grocery and perishables departments; labor scheduling by the end of the fiscal year; automatic time clocks at store level; and the ability to capture data flow on-line by year's end -- "all very basic stuff," Harris said, "which should give us a nice return."