HEDGE FUND REVEALS PENN TRAFFIC HOLDINGS
SYRACUSE, N.Y. — A hedge fund controlled by billionaire investor Steven A. Cohen has purchased a 9.7% ownership stake in Penn Traffic with an eye toward benefiting from “various strategic alternatives” available to the retailer here. Cohen's CR Intrinsic Investors in a government filing last week said it had purchased 805,000 shares of Penn Traffic in the open market at a cost of approximately $15.5 million. In the filing, CR noted that recent transactions occurring in Penn Traffic's geographical footprint — an apparent reference to Morgan Stanley's recently announced purchase of Tops Markets — indicate the company has strategic alternatives available to it. Cohen's SAC Capital invested in retailer Pathmark shortly before its purchase by A&P.
LABOR COSTS, SPENDING IMPACT WEIS' THIRD QUARTER
SUNBURY, Pa. — Increased labor costs and accelerated depreciation of capital spending projects contributed to a 6.5% decline in third-quarter net income for Weis Markets, the company here said last week. Net income for the 13-week period ended Sept. 29 declined to $10.8 million, or 40 cents per share, on sales of $565 million. Overall sales increased by 1.4%, and comparable-store sales increased 1.8%, Weis said. Sales were boosted by increased perishable sales and aggressive promotions in some markets. Sales gains were offset by lower pharmacy sales resulting from generic prescriptions supplanting brand-name counterparts and by the shift of Medicare Part D prescriptions to mail order.
SUPERVALU SEEKS REPAYMENT AFTER EMAIL SCAM
MINNEAPOLIS — Supervalu is seeking the return of millions of dollars it said it was duped into sending to accounts in Florida and Arkansas to entities that represented themselves as suppliers. In court documents filed in U.S. District Court here that were recently unsealed, the company said it paid more than $6.5 million to a phony American Greetings account and nearly $3.6 million to a phony Frito-Lay account after receiving emails detailing changes in those company's bank accounts. Authorities were able to seize the accounts. No charges had been filed as of last week. The actual suppliers also are laying claim to the funds, according to the filings. In a prepared statement, Supervalu said it “was the target of attempted financial fraud. Due to our internal controls and processes, we were able to quickly discover and report this to the FBI. As a result of the quick work of the Boise FBI Office and the U.S. Attorney, any funds lost are minimal.”
A&P RECEIVED $110 MILLION IN FARMER JACK SALES
MONTVALE, N.J. — A&P received $110 million in cash for the sale of 41 Farmer Jack stores in the Detroit area, the company said in a filing with the Securities and Exchange Commission last week. It is continuing to market the 25 Farmer Jack locations and two warehouses it still owns in the area, although it said additional sales were “not considered imminent.” As previously reported, Kroger acquired 20 locations and wholesale customers of Spartan Stores acquired another 14 locations. A total of 15 different entities purchased the outlets, A&P said.
SECOND HARVEST HONORS KROGER FOR HUNGER RELIEF
CINCINNATI — Kroger Co. has been named “Retailer of the Year” by the hunger relief charity America's Second Harvest, the retailer here said. Kroger was honored for donating more than 30 million pounds of food and other needed products last year. In addition, the company's “Bringing Hope to the Table” campaign, a nationwide promotion that encourages customers to purchase items from participating suppliers to support local food banks, raised more than $6 million in the last two years. This marks the fifth time in seven years that Kroger has won this honor. Recipients are selected by food banks that are members of America's Second Harvest.
