MONTVALE, N.J. With its new management team in place, grocer A&P is moving ahead with its turnaround plan amid a 6.6% drop in same-store sales and a wider net loss for the second quarter.
"Our second-quarter financial results are disappointing. But, we have developed a comprehensive turnaround plan and have quickly begun to implement it. The first step in that plan is the formation of the new management team," stated Sam Martin, president and CEO, who joined the company in late July. "With out talented and deeply experienced new team now in place, we have begun to executive against the other steps in the plan on an accelerated basis."
Sales for the second quarter were $1.9 billion versus $2.1 billion in the year-ago period. Net loss for the quarter totaled $153.7 million compared with a loss of $80.3 million in the year-ago period.
As previously reported, the company has made, since the end of the last quarter, a series of executive appointments to round out the new leadership team under Martin. In addition, the company continues to take steps to strengthen liquidity, reduce structural and operational costs, improve the customer value proposition, and enhance the in-store experience.
For example, A&P has, in an effort to bolster liquidity and shed noncore assets, contracted the sale of seven stores in Connecticut. The deal is expected to close Nov. 1. A&P still is pursuing additional financing initiatives, including sale-leaseback transactions and sales of additional noncore and/or nonperforming assets.
The company also has shuttered 25 underperforming stores and is in discussions with several operating partners to find ways to trim its structural operating costs. It also reduced headcount, saving roughly $10 million annually.
Meanwhile, in the stores, the grocer is expanding its private-label brands, including America's Choice, Food Basics and The Food Emporium Trading Co.
It also is analyzing loyalty card data to identify target consumer segments and clusters to ensure it is offering the most relevant assortment and value to shoppers.
"The board and I are encouraged by the initial actions taken by Sam and his new executive team to strengthen A&P's operating foundation," stated Christian Haub, executive chairman. "The board and the company's major shareholders, Tengelmann and Yucaipa, have full confidence that this team will continue to make significant, incremental progress in executing our turnaround plan for the benefit of all our stakeholders."