RICE PLANS TO SELL UNITS AND CHANGE NAME

ELLIOT ZWIEBACH

HOUSTON -- Rice Food Markets here said last week it plans to sell or close more than half its stores and change its corporate name.

The new name will be Rice Epicurean Markets -- the banner on eight stores that account for two-thirds of the company's volume; a ninth store is set to open late next month.

The Epicurean stores are an upscale perishables-oriented format that Rice has been operating for the past 10 years.

To concentrate on those upscale stores, the company said, it would dispose of 12 other units -- selling nine and closing three -- that operate under different formats.

"This strategic move was made in order to fully concentrate on the growth potential of the Rice Epicurean stores and to reinforce our strong brand image," Gary Friedlander, president, said.

The company said its plans include the following:

Selling the nine stores Sept. 25 -- reportedly to area independents, all customers of Rice's wholesaler, Grocery Supply Co. here.

Considering the addition of new service departments at the stores, including sushi bars and Oriental food counters.

Launching a year-long celebration marking the 10th anniversary of the Epicurean format. Expanding its new catering division. Friedlander declined to reveal the chain's volume, although industry estimates put it at about $200 million. The stores Rice is selling range in size from 26,000 square feet to 32,000 square feet and operate under three formats, Friedlander said: Six are PriceBuster Foods discount stores, three are Grocery World price-oriented superstores and three are conventional Rice Food Markets. Friedlander said two PriceBusters and one Rice, whose leases are about to run out, will be closed on Sept. 25. The other nine stores will be sold on the same date, he said, although he declined to name the buyer. Local observers said the nine stores would be sold to customers of local Grocers Supply Co., which is Rice's supplier. Representatives of the distributor could not be reached for comment last week. Friedlander said the stores being closed or sold "do not fit the Epicurean formula because of their locations, and we felt the best thing for us to do was focus on our best, most successful operations, and that's the Epicurean stores. "And when the opportunity to sell the other stores came along, we took it because we can utilize the capital for growth of the Epicurean stores, in the areas of technology and new stores." The Rice Epicurean Markets focus on perishables and service, Friedlander said. Eight of the nine are located within six miles of one another, in the highest-income demographic neighborhoods of Houston.

Among the store's departments are expanded produce; service floral; service meat and seafood; Haute to Go prepared entrees; See's candy shops; Honey-Baked Ham shops, at five locations; expanded frozen foods, and dairy. Endcaps typically feature upscale foods and wines, Friedlander said. The ninth Epicurean Market will open Oct. 20 at a store Rice acquired from a local independent. At 26,000 square feet, the store is smaller than other Epicurean locations, Friedlander said. "We will offer our full assortment of perishables there, at the expense of dry groceries, which will be limited to about 950 linear feet, compared with 1,500 linear feet at most of the other Epicurean stores," he explained.

To use space most efficiently, he said Rice is cutting out size duplications, and added he does not expect the limited grocery assortment to hurt sales at that store. As Rice seeks to expand its in-store offerings, Friedlander said the company would be looking at sushi bars and an expanded Oriental foods line, including egg rolls, wantons and fried rice, sold through the service meat departments. During the upcoming year Rice will mark the 10th anniversary of the Epicurean format with a series of promotions built around the theme, "Decade of Delights Diamond Celebration," Friedlander said. Friedlander said Rice plans to concentrate on its new catering division, Epicurean Catering Co., formed earlier this year. The food preparation for catering is currently done at the store level, but Friedlander said he hopes to open a central commissary within a year "to get a better handle on the process and to get food to people faster.