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Spartan Closes 13 Food Towns
According to Spartan, the 13 stores fell short of financial performance targets and were adversely affecting operating cash flow. The remaining 26 Food Towns may be sold to other retail grocery operators or some of them may be converted to a different format.
The 13 stores slated to close generate some $110 million in annual sales. Spartan anticipates a non-cash pretax charge of $10 million to $12 million during the third quarter as a result of the closings.
Craig C. Sturken, Spartan’s new president and CEO, said the company’s excess store capacity in the Toledo area market has made it difficult for many grocery operators to maintain profitable operations.
“The decision to close the stores will help to strengthen our overall competitive retail market position,” he stated.
The company anticipates operating profit and cash from operations will improve after the closings“The store closings will allow us to better focus management’s efforts and capital on key strategic markets where we have the strongest growth and value creation opportunities,” said James B. Meyer, transitional chairman and former president and CEO. He said the closures will hasten Spartan’s retail operations’ return to profitability.