C&S RESTRUCTURES, ACQUIRES TOPS' DISTRIBUTION FACILITIES

MARK HAMSTRA

BRATTLEBORO, Vt. -- Food retailer and distributor C&S Wholesale Grocers here last week appeared to be positioning itself for future growth by reorganizing its operations under a holding company and agreeing to take over the grocery distribution for Tops Markets, Williamsville, N.Y., a division of Netherlands-based Ahold.

The company's acquisition of Tops' distribution operations -- expected to be completed by August -- gives C&S a distribution foothold in some new markets that could serve as a platform for customer acquisitions. It also gives C&S a significant convenience-store distribution base serving the 212 small-format stores that Tops operates under the Wilson Farms, Sugarcreek, Tops Express and B-Kwik banners. In addition to the convenience stores, Tops has 151 traditional Tops Friendly Markets supermarkets in the Northeast.

Carl Wistreich, spokes-man, C&S, said his company currently does not have distribution centers in the Buffalo, N.Y., or Cleveland areas, where Tops' facilities are located, and noted that the new facilities "have potential" to supply new customers in those areas. He declined to discuss the terms of the acquisition or other details about C&S's plans.

The acquired facilities include an 880,000-square-foot, six-year-old DC in Lancaster, N.Y., which employs about 720 and has a fleet of 82 tractors and 361 trailers. The two other sites are a frozen-foods DC in Cheektowaga, N.Y., and a 52-year-old DC in Maple Heights, Ohio, which employs about 325 and has a fleet of 42 tractors and 183 trailers.

Stefanie Zakowicz, spokeswoman, Tops, said the retailer had not been taking full advantage of the site capacity in Lancaster, one of the largest food-distribution facilities in the region.

"This allows us to focus our attention on our retail operations, and allows the distribution center to become fully utilized as C&S plans to grow and expand their usage of the center," she said.

She also said funds from the sale of the centers could be used to expand Tops' retail presence.

"This gives us some fresh dollars to invest back in the business," she said. "Some of it may go to new growth. We've been looking to expand into new markets, and obviously this may give us the ability to do that."

C&S already supplies groceries for other Ahold divisions, including Giant Food, Carlisle, Pa.; Stop & Shop, Quincy, Mass.; and Giant Food, Landover, Md.; the latter of which is a customer for frozen foods.

Wistreich said Tops would be one of the Top 5 accounts at C&S.

Burt Flickinger, managing director, Reach Marketing, Westport, Conn., said C&S is positioning itself to become a national player in the food-distribution business.

"C&S clearly has designs on becoming the largest wholesaler east of the Mississippi and certainly challenging Fleming and Supervalu for national leadership," he said.

Meanwhile, C&S said that its new holding company, C&S Holdings, will oversee its five different business entities, including its 25-unit Grand Union supermarket operations, the ES3 logistics service provider, LC Transportation, ice maker J&R Ice Cream Corp. and C&S Wholesale Grocers. C&S said the structure of the new holding company will enable the businesses to better share the experience and knowledge of the company's leadership.

As part of the new alignment, C&S promoted Ron Wright to president of C&S Holdings and Ed Albertian to president of C&S Wholesale Grocers. Rick Cohen remains chief executive officer.

Flickinger said the new structure of C&S would position the company to better work with a variety of large customers.