SCHULTZ BOARD PROPOSES SETUP OF HOLDING COMPANY

SHEBOYGAN, Wis. -- Schultz Sav-O Stores here said last week its board of directors has proposed restructuring the company's corporate structure to create a holding company called Fresh Brands, pending shareholder approval.

nagement teams under different names and formats, improve our ability to operate stores of different brand names, provide greater flexibility in meeting financing needs, and create one entity, Fresh Brands, that will be recognized by shareholders, the public and financial institutions."

Winn said that if the proposal is approved, each Schultz shareholder will receive one share of stock for every share of Schultz stock he or she owns.

"Our belief is that, as we pursue growth and expansion initiatives, the name 'Fresh Brands' will more accurately reflect the future growth and direction of the company," said Winn. "As we move forward, we believe our expansion will occur through the addition of individual stores or group of stores which may operate under the Piggly Wiggly name, as well as multi-store acquisitions under other brand names."

In line with this new strategy was Schultz's acquisition of Dick's Supermarkets on April 18, an eight-store chain based in Platteville, Wis.

The company also said a decrease in competition, a price-impact marketing program and store additions helped to achieve record sales and earnings for the first quarter, ended April 21.

Net sales for the first quarter of 2001 were $155.7 million, a 5.4% increase over last year's first quarter sales of $147.7 million. Net earnings for the first quarter were $1.89 million, an increase of 1.2% over the previous first quarter.

Diluted earnings per share for the first quarter of 2001 were 34 cents, a 9.7% increase over diluted earnings per share for the first quarter of 2000.

Retail sales for the first quarter of 2001 improved 3.6% to $64.5 million, compared to $62.2 million in 2000. Net wholesale sales for the first quarter of 2001 increased 6.7% to $91.2 million, compared to $85.5 million last year.

Same store sales for the Piggly Wiggly retail banner increased 2.8% percent over the previous first quarter.

"A key factor behind the sales improvements from both our retail and wholesale operations was our successful Piggly Wiggly Preferred Power Pricing marketing and promotional program that we initiated in January 2001," said Winn. "Our sales improvement also benefited from store closures by certain of our competitors in the past 12 months."