MONTVALE, N.J. — A&P’s new chief executive officer on Friday insisted the company was making progress toward strengthening liquidity, reducing costs and improving stores amid accelerated losses and plummeting sales in the fiscal second quarter.
Sam Martin, who was named CEO in July to head a turnaround effort at the struggling retailer, said his new management team was at work on five “building blocks” of the turnaround, including an effort to add a new term loan that would provide the company with the liquidity to make needed changes.
“The fact is we’re bringing comprehensive change to this company through all facets of the organization. These are significant and substantive changes and realistically they will take some time to produce the improved financial results we are all looking for,” Martin said. “But there should be no doubt that this management team is moving with urgency.”
Sales in the 12-week quarter, which ended Sept. 11, decreased 7.1% as A&P posted a quarterly loss of $153.7 million. Comparable-store sales fell by 6.6%, with all divisions showing negative sales growth during the quarter.
Jake Brace, A&P’s new chief administrative officer, said the company was negotiating with its lenders on a “complex” real estate backed term loan to be added to its existing asset-backed facility. “When we do close and fund the transaction this will create a significant amount of liquidity and provide us the time necessary to make the needed changes in our business.”
The company reiterated its previous intentions to raise funds through the sale of “non-core” assets, believed to include its Food Emporium gourmet chain in Manhattan. One source told SN this week that the company could make an announcement on such a deal by the end of this month.