Spartan Stores reports 3Q sales
GRAND RAPIDS, Mich. Spartan Stores on Wednesday reported a decline of 0.1% in consolidated net sales of $781.9 million for the 16 weeks ending Jan. 3. Retail segment sales actually increased through the third quarter, Spartan reported, due to 3.3% comparable stores sales growth excluding fuel. However, that increase was partially offset by lost retail sales from the sale of four retail stores to distribution segment customers and closure of a single store since the third quarter last year, and lower sales related to the company’s marginally profitable pharmacy distribution program.
Third-quarter operating earnings improved by double digits for the 12th consecutive quarter, the company reported, increasing 17.4% to $17.9 million. “We are very pleased to be extending our track record of double-digit profit growth, particularly in the present economic climate,” stated Dennis Eidson, Spartan’s CEO. “Our operating earnings growth is being driven by our retail store acquisitions and capital investment program. We are especially pleased to be reporting our 10th consecutive quarter of retail comparable store sales growth. As consumers continue to shift their purchasing toward value-oriented products and services, our private label, fuel rewards, $4.00 generic prescription program and other consumer-centric offerings are gaining traction by better serving consumers’ needs.”
Across the company’s retail outlets, total third-quarter net sales increased 1.8% to $384 million. Third-quarter retail operating earnings increased 58% to $6.8 million.
“Our focus on the consumer has allowed us to achieve sustained and positive financial results, and has helped to strengthen our market position and customer loyalty,” Eidson said. “We continue to be very pleased with the results of our capital program, particularly at our acquired Felpausch stores. Recognizing the difficult economic circumstances facing today’s budget conscious consumers, we have been working to bring even more value to our customers through our extensive private label products, the launching of our $4.00 generic prescription program in our Grand Rapids market and exciting deep discounted fuel promotions,” he said.
“We expect comparable retail store sales to increase in the low single digits during the remainder of fiscal 2009, but be below our third-quarter results due to the cycling of sales from stores remodeled last year,” Eidson added. “This expectation also excludes the effect of the Easter holiday sales, which contributed 1.2% to comparable stores sales in last year’s fourth quarter. There is no Easter holiday included in fiscal 2009.”
Elephant out of business because of economy; lack of financing
BERKELEY, Calif. The challenging economy claimed its latest retail victim Tuesday, as Elephant Pharm shuttered its three locations for good after filing for liquidation under chapter 7 of the United States Bankruptcy Code.
The chain’s three locations had been open on Monday.
“The company has been burdened with obligations that were quite difficult for a company of our size to carry,” Elephant Pharm CEO Kathi Lentzsch stated. “The current management team and board of directors worked diligently to grow the company to a size that could bear these obligations, but due to the current economic conditions and the tightening of the credit market, it has not been possible to raise the capital required to continue the business.”
That suggests the Elephant business may have failed more because of its lack of heft — Elephant fielded the buying leverage of only three locations to fill store shelves in a full-size 12,000-square-foot-plus footprint — than because of its pharmacy business vision as a pharmacy that dispensed both traditional allopathic medicines and Ayurvedic herbs.
Pharmaca, based in Boulder, Colo., fields a similar business model, albeit in a much smaller retail box. Averaging 5,000-square-feet per location, the 23-store chain has secured some $20 million in financing this past spring and has more than doubled in size in the past year.
Executives at Elephant Pharm had been trying to secure additional financing in an exceedingly financing-poor market for the past year. The chain closed its Los Altos, Calif., location, which had been its fourth store, this past September. “In spite of these efforts, the company was ultimately unable to meet its mounting obligations and regretfully had no choice but to close its stores,” the company stated.
“We are extremely proud of our team and what we were able to accomplish in the 6 years since we opened. We would like to thank our vendors and our very loyal customers for their support over the years.” Lentzsch said. “Elephant has been both a leader in its industry as well as a reflection of a greater societal movement for healthy change.”
Elephant Pharm employed 190 people across its three stores and at the home office.
Febreze launches Destinations Collection
CINCINNATI Febreze has launched its new Destinations Collection, offering fragrances in three scents: Hawaiian Aloha, Brazilian Carnaval and Moroccan Bazaar.
The new collection was inspired in part by the growing “staycation” trend.
“During these uncertain economic times, consumers are becoming more creative in providing escapes for themselves and their families without breaking the bank,” stated Scott Beal, Febreze brand manager. “The Febreze Destinations Collection offers boutique scents from around the world that create a temporary getaway through an authentic scent experience.”
The launch will be supported by an online “From Staycation to Vacation” sweepstakes on www.febreze.com/destinations that will run from Feb. 2 to July 5, 2009. One grand-prize winner will receive a trip for four to Hawaii, Morocco or Brazil. Ten first-prize winners will receive $1,000 toward a home decor makeover and more than 1,500 consumers will win a coupon redeemable for any Febreze product.
The Febreze Destination Collection is available nationally at food, drug and mass retailers with prices ranging from $2.99 to $7.99.