A&P to Close 32 More Stores

JON SPRINGER

MONTVALE, N.J. — A&P here last week asked U.S. Bankruptcy Court for permission to close 32 stores as part of its restructuring plan.

The stores, operating in six states under the Waldbaums, Food Basics, A&P, Pathmark and SuperFresh banners, would close during A&P's fiscal first quarter, which begins next month. A&P announced 25 separate store closings last year.

“While this was a very difficult decision that will unfortunately impact some of our customers, partners, communities and employees, these actions are absolutely necessary as we work to strengthen A&P's operating foundation and improve our performance,” Sam Martin, chief executive officer of A&P, said in a statement.

A&P told the court that it expected to hire a liquidation consultant to conduct going-out-business sales at the stores. The retailer also asked to approve procedures to sell equipment, fixtures, liquor licenses and other assets at the closing stores. The company said it could realize as much as $5 million from these sales.

Including seven stores that were sold, and 25 stores closed in an earlier round of closings, A&P has shed 64 stores in recent months. It separately rejected dozens of leases for dark stores. Some sources last week speculated that the company could close even more before the bankruptcy process is complete. The closings could also make A&P more attractive to a buyer should one emerge during the Chapter 11 process, sources added.

The store closings are expected to cost thousands of jobs, most held by union employees. Representatives of several union locals told SN that they were informed of the closings by A&P last Tuesday.

“I can't say we were shocked, because the stores they said would close were not performing that well, but we had no prior warning of the announcement so it came as a surprise,” John Niccolai, president of United Food and Commercial Workers Local 464A, Little Falls, N.J., told SN. “We're very concerned about the membership, and were still looking to see if this company can turn itself around. So far we haven't seen it happen.”

Local 464A was A&P's hardest-hit union local, with 15 A&P, Waldbaums and Pathmark stores in New York and New Jersey employing members it represented among those closing.

Sam Ferraino Jr., president of Local 1360, Berlin, N.J., noted that the five southern New Jersey and Pennsylvania stores set to close in his union's jurisdiction were victims of increased competition from Wal-Mart Supercenters. Workers there told Ferraino that the stores suffered further from poor in-stock conditions.

“These were stores that were teetering on the edge, and they needed something to push them one way or another,” Ferraino said. “For most of them, it was one more Wal-Mart.”

In a memo to union workers, Bruce W. Both, president of UFCW Local 1500, Westbury, N.Y., reiterated a common theme among labor unions that so far have taken a hard hit in the A&P bankruptcy: The company needs to do more than cut costs.

“Store closings alone will not save this company, and they must focus on providing their employees and customers with innovative leadership, cutting-edge technology and a more thorough and competent understanding of the grocery industry,” he said.

A&P emphasized that such changes were on the way, announcing a slate of new executives in its marketing and merchandising fields last week. A&P said it named Marie Robinson senior vice president of supply and logistics; Nancy Gaddy, vice president of deli and bakery; Kevin Broe, vice president of own brands; Harry Giglio, vice president of meat and seafood; Bob Weidner, vice president of customer experience and space management; and Corey Pearson, vice president of pricing and analytics. A&P also said its chief financial officer, Brenda Galgano, has resigned. Galgano, who also was senior vice president, had been named CFO in 2005. Her resignation is effective March 27.

For the complete list of closures, see: supermarketnews.com/retail_financial/ ap_close_stores_0215/