Fairway Group Holdings said Thursday that CEO Herbert Ruetsch plans to retire after 15 years with the company, parent of the Fairway Market chain, as it launches an “organization realignment” to cut costs.
William Sanford, currently president of Fairway, was named interim CEO. The company said its board will begin a CEO search shortly.
In addition, Fairway named two co-presidents to succeed Sanford: Kevin McDonnell was promoted to co-president and COO, and Edward Arditte was promoted to co-president and CFO. McDonnell, who had been SVP and COO, spent 27 years with A&P before joining Fairway six years ago. Arditte had been EVP and CFO since 2012, and before that had worked in financial and operations posts for 25 years at other companies, including Tyco International, BancBoston Capital and Textron.
Fairway said Ruetsch will remain a special advisor to the company and will continue to provide input into certain merchandising and product initiatives.
Charles Santoro, executive chairman of Fairway, said, "Herb Ruetsch has helped lead Fairway through a major transformation from a small family business into an iconic, growing specialty food retailer serving some 20 million customer visits annually in the tri-state area. All of us at Fairway would like to thank Herb for his many contributions to our success."
He added that Sanford “brings continuity, strong leadership and organizational skills, and has also played a very important role in Fairway's growth, development and success over his last five years at Fairway, including his previous roles as CFO and most recently as president.”
Separately, Fairway said its same-store sales — excluding a store in the Red Hook area of Brooklyn that was closed during the last nine weeks of the third quarter of last year — decreased by 1.7% in the most recent third quarter. The company attributed the decrease to the compressed holiday shopping period and the effect of Hurricane Sandy, which benefited sales in the third quarter of fiscal 2013.
Read more: Fairway Q2 results soften; stock dives
The net loss in the quarter, which ended Dec. 29, was $31.3 million, compared with a net loss of $44.5 million in the third quarter of a year ago. The adjusted net loss in the quarter — after accounting for a $25.4 million income tax provision and other charges — was $2.2 million, versus the adjusted net loss of $5.8 million in the third quarter of the prior year.
Sales increased 22.9% in the third quarter to $205.7 million.
Fairway said it has launched an organizational realignment to remove redundant costs and streamline parts of the business model to enhance its productivity. In connection with the plan, the company expects to incur charges, primarily severance, over the next year of approximately $7 million.
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