MONTVALE, N.J. — A&P said it would close 25 stores as it begins the implementation phase of its newly announced turnaround plan.
The stores slated for closure include locations in close proximity to other A&P-owned stores, those facing real estate and cost issues, and underperforming stores, the retailer said. The closures are expected to be completed during the fiscal third quarter, which begins in September. A&P officials declined to provide a list of stores slated for closure, although a spokeswoman told SN the closures “include those across our A&P, Waldbaums, Pathmark, Super Fresh and Super Foodmart banners.”
SN was able to confirm 20 locations slated for closure through union sources and published reports. Many are targeted for an Oct. 13 closing date, sources said.
“While this was a very difficult decision that will unfortunately impact some of our customers, partners, communities and employees, these actions are absolutely necessary to strengthen A&P's operating foundation and improve our performance going forward,” Sam Martin, chief executive officer of A&P, said in a statement. “We will help our affected colleagues pursue other positions across the company should open positions be available.”
Martin was installed as A&P's new CEO late last month as the company announced details of a “revenue-driven turnaround” plan intended to get the reeling company back to solid ground. The company also said it would explore selling some stores and raising money through sale-leasebacks.
Karen Short, a New York-based analyst following A&P for BMO Capital Markets, told SN last week that the stock market interpreted the closings as evidence that A&P was not looking to file a voluntary Chapter 11, as the company could break leases at those sites while operating under bankruptcy protection. Moreover, the company could use the closings to raise money by subleasing their locations, she noted.
Similarly, she saw senior executive appointments made last week as an indication that Martin had autonomy to make quick changes.
Short said many of the stores slated for closure were likely money-losers for A&P, and that a smaller group could be more productive overall. “These stores are EBITDA negative, and in some cases could be EBITDAR negative,” she said. “It was going to be an accretive decision regardless, and my guess is that over time they are confident they can re-lease the stores.”
Locations SN confirmed were set for closure included four A&P stores and eight Pathmark stores in New Jersey; two Waldbaums stores, two Pathmark stores and one A&P store in New York; two SuperFresh stores in Maryland; and at least one A&P Super Foodmart location in Connecticut.