Spartan Reacting To A $20M Loss
The company also reported a loss of $34 million, or $1.71 per share, on sales of $2.1 billion for the year, compared with annual earnings of $12.8 million, or 65 cents per share, for fiscal 2002.
President and CEO Craig C. Sturken, who was appointed March 3, said the results were disappointing but don’t reflect the many fundamental changes that the company recently implemented.
“We began a number of significant and very important initiatives during our fourth quarter that were just recently finalized or will be concluded shortly,” he said.
In recent months Spartan has:
- Eliminated approximately 11 percent of its corporate staff, a move expected to reduce costs by up to $8 million a year, beginning the second quarter of fiscal 2004.
- Closed 13 under-performing Food Town stores in the fourth quarter.
- Agreed during the first quarter of fiscal 2004 to sell 20 of the remaining 26 Food Town stores and is exploring options for the other six.
- Consolidated its remaining Ohio distribution operations into its Michigan facilities during the fourth quarter.
- Sold its convenience store distribution segment to The H.T. Hackney Co. and used the $29 million in net proceeds to reduce outstanding bank debt.
Sturken said when he joined Spartan earlier this year he quickly established clear organizational priorities and objectives and timelines for implementing them.
“These priorities are to focus our organization on distribution and retail sales growth; align our cost structure to industry standards; strengthen our financial position by rationalizing under-performing assets; and restore retail profitability by turning category management into a disciplined way of life throughout our organization.”
He said many of those changes are taking hold and “swiftly producing hard evidence of success.”
Spartan’s first quarter sales performance has significantly improved from its fiscal 2003 third and fourth quarter results, he noted.
“Retail store sales, excluding our discontinued Food Town operations, are trending positive. In fact, for the last four-week period of our 2004 first quarter, comparable store sales results from continuing operations are flat.”
The improving sales trends, he said, are the result of basic operational changes the company has made.“We are very enthused with these results and appear to be on track to rapidly improve our financial and operational performance, including and expected return to operating profitability from our ongoing operations in the first quarter.”