TAMPA, Fla. -- Kash n' Karry Food Stores here said it estimated same-store sales increased 1.5% in the third quarter ended May 1, which would mark the first positive same-store sales result the retailer has reported in fiscal 1994.
Kash n' Karry reported sales of $287 million in the year-ago period. The company attributed the estimated sales decline to the closing of 17 stores over the past 12 months. Two additional stores closed in June.
As reported, Kash n' Karry is in the midst of negotiating a proposed recapitalization plan with its bondholders, which, the company said, would provide the capital necessary to "fund store construction plans and re-establish its forward-buy inventory management program."
Leonard Green & Partners, a Los Angeles investment group that controls Kash n' Karry, called off a search for an equity investor in May after failing to reach an agreement with prospective buyers.
Kash n' Karry operates about 100 food stores and 33 liquor stores throughout west-central Florida.
In the third quarter, the company expected to achieve operating cash flow (or earnings before interest, taxes, depreciation, amortization, store-closing and other costs) of $14.3 million, which would mark a decline of 19.2%.
Kash n' Karry said that much of the lower cash-flow total could be attributed to its decision to pass up "favorable inventory acquisition opportunities due to its reduced working capital availability."
Separately, Kash n' Karry said it closed two stores "because of unsatisfactory profitability" last month. One of the stores was a 29,000-square-foot Kash n' Karry unit in Sarasota, Fla., and the second unit was a 75,000-square-foot Save 'n Pack warehouse store in Palm Harbor, Fla.
Eight management positions were eliminated as a result of the two closings, but 143 associates were offered other positions, the company said.