The Fresh Market said Thursday it would close three locations in Sacramento, Calif., and one store in Houston to focus on expansion in existing markets.
“Following an in-depth analysis of our stores and the markets in which we operate, we made the strategic decision to close four stores,” saidCraig Carlock, president and CEO, The Fresh Market, Greensboro, S.C. “In addition, we are refining our real estate plan to focus on increasing penetration in existing markets while slowing the pace of our expansion in new markets. We believe these actions will allow us to allocate capital and resources to opportunities that are more in line with our historical returns.”
As a result of the store closures, the company said it expects additional charges in fiscal 2014 of $18 million to $20 million. The stores are expected to close in the coming days.
The Fresh Market had entered California in 2012, leaping across the country from its base in the Southeast. Last year it opened four stores in Houston through the acquisition of Rice Epicurean Markets there. It currently has five stores in California, according to its website.
The Fresh Market also reported fourth-quarter net income of $2 million, compared with $20.6 million in the year-ago period. The recent quarter included a pre-tax impairment charge of $27.6 million. Adjusted net income, excluding the charge, was down 8.7%, to $18.8 million.
Fourth-quarter sales increased 15.1% to $425.8 million, and comparable-store sales increased 3.1%. The fourth-quarter comparable store sales increase was due to a 1.6% increase in average transaction size and a 1.5% increase in transaction volume.
For the full year, which ended Jan. 26, net income fell 20.8%, to $50.8 million, including the fourth-quarter charge. Sales totaled $1.51 billion, a 13.7% increase vs. the preceding year. Comparable-store sales increased 3.2%.
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