EAGLE NAMES KELLY PRESIDENT, CEO

GLEN A. BERES

MILAN, Ill. -- Eagle Food Centers here has named Robert J. Kelly president and chief executive officer, effective today.

Kelly, 50, succeeds Pat Petitti, who is retiring from the company a second time -- although Petitti will continue as a member of Eagle's board, the company said. Kelly was executive vice president of retailing at Vons Cos., Arcadia, Calif., where he worked for 32 years. "Bob is an excellent addition to the company and brings a great wealth of supermarket industry experience, touching virtually all aspects of the business," Petitti said in a statement. "His expertise and leadership will be extremely valuable in restoring Eagle to profitable growth."

Petitti, 65, originally retired in 1992 after 35 years with Eagle. But he came out of retirement in April 1994, after his successor, Gerald E. Barber, resigned. Petitti's new stint at the company was never intended to be long-term, according to observers.

Kelly could not be reached for comment.

By all accounts, he will have his work cut out for him. The 96-store Eagle chain has suffered from eroding sales, mounting losses and intense competition from larger players in its Illinois, Indiana and Iowa markets in recent years, according to observers.

As reported, Eagle had a loss of $18.9 million for the year ended Jan. 28, compared with a loss of $10.1 million the prior year. Sales fell 4.5% for the year to $1.02 billion, while same-store sales dropped 2.6%. In response to the disappointing performance, the company said it will cut capital expenditures by 57% to $6 million, compared with $14 million in 1994.

Howard Goldberg, a high-yield securities analyst with Smith Barney, New York, said Kelly should make rejuvenating sales his first priority as CEO.

"[Eagle] has been lagging on the merchandising front, and they've taken a subdued stance in the marketplace," Goldberg said. "Also, they haven't done a good job promoting themselves and same-store sales have suffered.

"Eagle has underperformed its peers. If new management can raise the sales level, it will cover a multitude of sins."