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A&P enters agreement to receive $490M to sponsor plan of reorganization

BY Antoinette Alexander

MONTVALE, N.J. — Bankrupt grocer A&P has entered into an agreement to receive $490 million of debt and equity financing from investors that will enable it to complete the restructuring of its balance sheet and emerge from Chapter 11 as a private entity in early 2012.

The financing is from private investors comprised of the Yucaipa Cos., Mount Kellett Capital Management and investment funds managed by Goldman Sachs Asset Management. The investment will form the basis of A&P’s plan of reorganization, which the company anticipates filing prior to Nov. 14.

The agreement is subject to approval of the U.S. Bankruptcy Court for the Southern District of New York.

 “This investment commitment is a very important step in A&P’s financial and operational turnaround,” A&P president and CEO Sam Martin said. “It positions us for a bright future with solid financial backing from sophisticated investors who know our company and industry well, and who also share our vision for A&P’s future.”

Martin continued: “We have been working diligently over the last year to execute a successful turnaround at A&P by enhancing the value and in-store experience we provide to our customers and by successfully driving substantial efficiencies across our operations and supply chain to reduce our cost structure. Going forward, these investors are committed to supporting further operational and service improvements. With this fresh capital investment and the court’s approval of our plan of reorganization, we anticipate emerging from Chapter 11 early next year in a much stronger competitive and financial position.”

Following the closing of the transaction and the company’s emergence from Chapter 11, A&P’s current board will be dissolved, and a new board will be appointed in accordance with the terms of the plan of reorganization.

During the company’s exit process, A&P intends to continue to operate its stores normally with the excellent products and service customers expect.

A&P and its subsidiaries filed voluntary Chapter 11 petitions on Dec. 12, 2010.

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Food Lion raises $4.2 million for Children’s Miracle Network Hospitals

BY Allison Cerra

SALISBURY, N.C. — Food Lion announced that this year’s fundraising campaign to benefit Children’s Miracle Network Hospitals totaled $4.2 million.

This year’s donation represents a 43% increase over last year, Food Lion said. The supermarket chain, which has supported CMN Hospitals since 1991, has raised more than $40 million for the organization.

"Our associates and customers have done a wonderful job this year in raising much-needed funds — one dollar at a time — to help support research and treatment at children’s hospitals," Food Lion president Cathy Green Burns said. "This organization makes a tremendous difference in our communities. At Food Lion, we are passionate about children’s health and wellness issues, and we are fortunate to have partnered with this incredible organization for the past 20 years."

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Deloitte: Consumers in good spirits about holiday shopping

BY Gail Hoffer

NEW YORK — While consumers remain concerned about the economy, it is not enough to damper their holiday shopping spirit. According to a recent Deloitte survey, while two-thirds (67%) of consumers expect the economy to stay the same or weaken next year, nearly 3-out-of-5 people (59%) will put aside economic worries and spend the same or more this holiday season. This is a slight decline from 2010 but an eight percentage point increase from 2009.

Shoppers planning to spend less this year (42%) pointed to higher costs impacting their household budgets. Six-out-of-10 cited higher food prices (63%) and higher gas prices (60%) as reasons for spending less this year. Roughly half (49%) pointed to higher energy costs.

“Lackluster employment growth, debt crises and stock market fluctuations have battered consumer confidence while inflation left many with lighter wallets this fall,” said Alison Paul, vice chairman and U.S. retail & distribution leader for Deloitte LLP. “Consumers will be conservative this holiday season, but remain resilient and maintain a more positive interest in holiday shopping than we witnessed during the recession.”

The survey found that holiday shoppers plan to buy an average of 14.7 holiday gifts this year, down from 16.8 last year and continuing a four-year decline in the number of gifts they plan to purchase.

While all income groups plan to cut back on gift spending, as can be expected, higher-income households earning $100,000 or more annually said they expect to trim a mere 2% off gift spending to shell out an average of $812 on gifts this holiday season, compared with a 26% drop to $291 on gifts among those earning less than $100,000.

Gift cards, which had a long reign as the gift of choice, has been ousted from its top spot by apparel. The number of consumers planning to purchase gift cards fell 11 percentage points to 45%, while clothing went up to 48%. The number who plan to hand out cash slid seven percentage points to just one-quarter (25%) of respondents, Deloitte found.

The Internet continues to be a powerful tool for comparison shopping, with 68% of consumers planning to change the way they shop to save money, and more than 51% saying they will go online to find better prices. This represents a 10 percentage point jump from last year, while 46% plan to buy more items that qualify for free shipping.

Among shopping destinations, the Internet jumped 13 percentage points to join discount stores at the top of the list with nearly half (48%) of consumers planning to shop these two destinations for holiday gifts. While online interest climbed, discounters slid 10 percentage points from the 2010 survey.

Smartphones also will be an important shopper tool this holiday season, Deloitte found that more than 27% of smartphone owners plan to use their devices for holiday shopping to search for store locations (67%), compare prices (59%) and check product availability (46%). Additionally, 44% said they plan to use social media to seek discounts, read reviews and check family and friends’ gift lists.

Retailers counting on early sales are out of luck as more than half of consumers (53%) plan to begin shopping before Thanksgiving, but nearly three quarters (73%) intend to hold out until after this holiday to make the majority of their purchases.

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