ROCHESTER, N.Y. With its purchase this week by a new, deep-pockets owner and the return of a popular and energetic chief executive, Tops Markets may finally be emerging from a painful era of cutbacks and financial scandal as it works to regain momentum in western New York State and Pennsylvania.
Morgan Stanley Private Equity announced early this week it had finalized its purchase of the 71-store supermarket and food/drug combo-store chain from Royal Ahold, for a price of $310 million. Morgan Stanley executives praised Tops as “a well regarded grocer with attractive long-term performance, strong employee relationships and a loyal customer base,” and announced plans to reinvest in the company with an aggressive store-remodeling effort and the hiring of dozens of headquarters staff to beef up merchandising, marketing, information technology and other areas critical to improving customer satisfaction. Morgan Stanley also revealed plans to eventually consolidate those central-office functions in the Buffalo, N.Y. area.
In another key move, Morgan Stanley lured Frank Curci back to Tops as chief executive officer, four years after Curci left Ahold USA amid a series of financial scandals that roiled the management ranks and spurred a company-wide retrenchment. Although Curci himself was not implicated, he accepted oversight responsibility for the problems at Tops and agreed to leave Ahold.
His return appears to be a welcome development among Tops’ employees and managers, according to a report in The Buffalo News. David Smoot, managing director of Morgan Stanley Private Equity, praised Curci for his “vast knowledge of the supermarket industry and his familiarity with the Tops organization.
“We look forward to having Frank as a member of the Board and we are confident he will lead a smooth and successful transition,” Smoot added.
The sale by Ahold of its Tops division caps a long period of retrenchment for the chain, long known as a leader in supermarket and pharmacy retailing in upstate and western New York, Pennsylvania and northeast Ohio. Over the past three years, Tops has shrunk from a peak store count of more than 150 supermarkets to its current total of 71 company-owned stores and five franchised units. It has also severed its ties with the northeast Ohio region by selling its 46 stores in Cleveland and nearby markets to Giant Eagle, Rego’s Fresh Market, and other local operators. Since mid-2005, the chain has also exited eastern New York State with sales of stores to Price Chopper, C&S Wholesale Grocers and other rivals.