MONTVALE, N.J. — Work has already begun on Ron Marshall’s plan to revive A&P, although the chain’s struggles only intensified during his first months as the company’s chief executive officer.
In financial results announced Thursday, A&P posted a loss of $171.4 million on a comparable-store sales decline of 4.8% for the fourth quarter and a net loss of $876.5 million for the fiscal year, which ended Feb. 27.
Sales of $2 billion for the 12-week quarter were down 12.8% from $2.3 billion in the 13-week fourth quarter of 2009. Annual sales of $8.8 billion over 52 weeks declined 8.8% from $9.5 billion in the 53-week prior year.
In his first public remarks since taking the CEO job at A&P early this year, Marshall said the company was focusing on “clearly defining separate brand identities” for its legacy A&P and Pathmark stores. Legacy stores are undergoing a comprehensive price initiative known as “The Lower Price Project,” trimming everyday prices in 31 categories by as much as 10%, and Pathmark stores are getting a “back to roots” treatment under the “Project MMX” name designed to improve variety, in-stock positions and store cleanliness, and provide more “customer-centric” assortments based on area demographics.
Marshall said the company also intends by year-end to have implemented a plan to optimize distribution, which he said was never properly integrated following A&P’s acquisition of Pathmark. In an effort to curtail expenses, the chain has made corporate and store level staffing cuts this year that would save $22 million annually, and Marshall said he was personally approving all capital expenditures, expected to be around $75 million to $100 million in the new fiscal year.
“Upon joining the company, I conducted an in-depth review and quickly determined that the economy was clearly not the only reason for our disappointing results,” Marshall said. “We faced issues that are systemic, deep and profound, and must – and will – be addressed before we achieve the success that our shareholders and associates deserve.”
Brenda Galgano, chief financial officer, said the company was considering options to raise capital with an eye on debt maturities next year, including a potential sale of non-core assets and property sale-leasebacks.
A&P stock was down by more than 20% in mid-afternoon trading Thursday.
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