DELCHAMPS SETTLES LAWSUIT, SHIFTS ITS FOCUS TO FUTURE

LISA A. TIBBITTS

MOBILE, Ala. -- Delchamps here is attempting to regain its position as this market's low-price leader in the wake of a settlement with three fired executives who sued the company for numerous alleged misdeeds.

The company recently reached an out-of-court settlement with Roy W. Henderson, former treasurer and vice president of finance; James H. McDonald, former vice president and general counsel; and John D. Foshee, former vice president of real estate.

As reported, the three long-time former employees filed a suit in late March against the company and Randy Delchamps, its former chairman and chief executive officer, charging both with fraud, mismanagement of company finances and other offenses.

The plaintiffs also alleged they were fired for questioning the direction in which Randy Delchamps was taking the company and for suggesting he change his management practices.

Although the terms of the settlement were confidential, Henderson's attorney, Richard Meelheim of Meelheim & Alexander, Birmingham, Ala., said his client was "very satisfied."

With the suit behind it, Delchamps is now trying to set its house in order by repositioning itself as a low-price operator and installing new management, observers told SN.

The company has reverted to a price-sensitive strategy and adopted a new slogan -- "Delchamps, where you will always find so many things for so much less."

Timothy Kullman, senior vice president and chief financial officer, said the chain is hoping these strategies will bring back the portion of its core blue-collar customer base that was lost when Randy Delchamps tried to attract more affluent shoppers through higher prices and upscale new stores.

Moreover, the company has undergone a series of management changes in the past several months, as reported. David W. Morrow was named chairman and, temporarily, chief executive officer, following Randy Delchamps' resignation in April. Richard W. La Trace Sr. was named president earlier this month.

Delchamps is still searching for a new CEO, as well as a senior vice president of retail operations -- a position that was previously held by Hugh Van Hooser. Van Hooser recently took early retirement after some 40 years with the company.

In another change, George Waldron III, Delchamps' former senior vice president of marketing and corporate relations, resigned several weeks ago after some 30 years at Delchamps. His position will not be immediately filled, the company said.

"There will be no more significant management changes," Kullman said. "We have the search under way for Mr. Van Hooser's former position. We hope to fill that within the next 30 days. Then our management team will be intact."