MINNEAPOLIS -- Nash Finch here said last week it is willing to continue to operate three Avanza stores indefinitely if it cannot find a buyer.
"Those stores are doing very well, and we're very pleased by their performance. So there's no fire sale going on," Ron Marshall, Nash Finch's chef executive officer, told analysts. "If we find there isn't an opportunity to get the right price, we would be perfectly happy to run those stores going forward."
Nash Finch said last May it was closing two stores in Chicago and one in Pueblo, Colo., operating under the Avanza banner, the company's Hispanic format, and putting the three Avanza stores in Denver up for sale. Marshall said last week the company has had "a couple of offers" for those stores, but no sale is imminent.
Marshall made his remarks during a conference call to discuss financial results for the third quarter and 40 weeks ended Oct. 9.
Corporate retail sales fell 17% to $241.8 million for the quarter and 12.9% to $638.5 million for the year to date, and same-store sales decreased 5.7% for the quarter and 7.3% for the year to date. Operating profits rose 36.7% to $10.8 million for the quarter and dropped 29.5% to $17.2 million for the year to date.
"[Corporate retail] is not a segment we'll invest in in a significant way going forward," Marshall said. "This segment accounts for less than 20% of our total, and it will continue to contract."
Nash Finch operates 87 corporate stores, down from 109 at the end of the third quarter in 2003.
Overall company sales declined 1.9% to $1.2 billion for the16-week third quarter and rose 0.6% to $3 billion for the 40-week period. Net income rose 25.8% for the quarter and fell 83.3% for the year to date, which included two after-tax charges: a special charge of $22.3 million reflecting non-cash costs associated with the closure of 18 corporate retail stores during the second quarter, and $2 million from inventory markdowns related to the store closures.
Food distribution sales rose 1.1% to $610.9 million for the quarter and 5.5% to $1.5 billion for the year to date; operating profits rose 4.1% to $22.7 million for the quarter and 16.1% to $54.9 million for the 40 weeks.
Marshall said Nash Finch is adding business from other wholesalers; from retailers who have acquired additional stores from Winn-Dixie and Albertsons; and from a contract with Dollar General to supply full grocery lines to its expanded format stores, Dollar General Market.
Military sales rose 6.1% to $338.5 million for the quarter and 4.2% to $847.4 million for the year to date.
