Fresh Market board to conduct strategic review

The Fresh Market on Tuesday said the company and its board of directors would conduct a strategic and financial review of the business with an eye on “value-enhancing initiatives” including a recapitalization or a sale.

The acknowledgement comes in the wake of reports last week that there was interest from company founder Ray Berry in taking the specialty food retailer private in combination with Apollo Capital Management, although The Fresh Market’s statement did not address that possibility specifically.

Analysts have said that a going-private transaction would allow The Fresh Market to address pricing concerns, store closures and other issues away from the scrutiny of the public markets. Others have speculated that a strategic buyer such as Sprouts Farmers Market could have interest in the chain.

Sprouts at one time was privately held by Apollo; according to reports, its success in partnership with Apollo attracted Berry’s interest in reacquiring the company. Berry holds 4.1% of The Fresh Market’s stock.

Sprouts wasn’t immediately available for comment.

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The Fresh Market saw its comp sales turn negative in the last reported quarter as a result of competitive challenges, slow inflation, and ineffective promotions, officials said. The company dismissed CEO Craig Carlock in January, and last month, hired former Food Lion CEO Rick Anicetti to succeed interim CEO Sean Crane. Crane remains the company’s COO.

“Since joining the company, Rick and his team have been working to identify and execute on opportunities to improve the company’s sales growth and to drive operational efficiencies,” Rich Noll, Fresh Market’s lead independent director, said in a statement. “An update on these findings will be provided when the company reports its third quarter fiscal 2015 earnings in November. The board of directors has determined, consistent with its obligations to the company and its stockholders and together with the work being done by management, that it is also prudent to conduct a strategic and financial review of the business focusing on the company’s and its stockholders’ best interests.”

The Greensboro, N.C.-based company cautioned that the review may not result in any specific action, and said it did not intend to comment further before the board approves a specific action or concludes its review.

Founded in 1982, The Fresh Market is a specialty grocery retailer focused on high-quality products and a high level of customer service. It operates 178 stores in 27 states.

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