WAYNE, N.J. -- Grand Union here said last week it has terminated two more senior executives and 34 staff positions to reduce overhead.
The two executives are Don Vaillancourt, corporate vice president for corporate affairs and corporate secretary, and Ray Ayers, corporate vice president for real estate. Each had been with the company for more than 20 years.
Their departures follow the removal earlier last month of J. Wayne Harris as chairman and chief executive officer and the resignation of Jack W. Partridge as vice chairman and chief administrative officer. At the time the company did not give reasons for Harris' and Partridge's departures.
Grand Union also told SN last week the staff terminations mostly involved administrative staffers in the corporate office and a couple of field people.
Jeffrey P. Freimark, the company's chief financial and administrative officer, said the latest terminations were made "with the objective of reducing our overhead burden and eliminating a layer of bureaucracy."
Freimark said he does not anticipate additional cutbacks, "but I wouldn't rule that out." Securities analysts told SN the cutbacks may be an inevitable result of disappointing results in the third quarter ended Jan. 8, which showed operating cash flow down 22.7%.
Ed Comeau, an analyst with Donaldson Lufkin & Jenrette, New York, said Grand Union is making adjustments in overhead "to make sure it does the best it can to salvage the bottom line in the next few reporting periods.
"Grand Union is in the beginning stages of seeing the impact of its store-development and remodeling strategy on the bottom line, but it might be a year before it reaps the full benefits. Right now the fourth quarter looks soft, and there are no guarantees for the first quarter, so Grand Union is battening down the hatches to make sure expenses are in line should things not go as expected in the short term."
Gary Giblen, portfolio manager for First New York Securities, New York, said the chain has to cut costs "because it's under a lot of pressure. Grand Union management already cut into the company's fat at the time it emerged from bankruptcy a year and a half ago, and now it's cutting into muscle and maybe into bone to save the entire body."
Vaillancourt's responsibilities for corporate affairs are being absorbed by Sue Marsh, manager of corporate communications, and Ayers' real-estate responsibilities are being taken over by Tony Gallinari, vice president for real estate; both Marsh and Gallinari report to Freimark.
