Spartan Stores Inc. announced yesterday that it will close 13 unprofitable Food Town grocery stores in the Toledo, Ohio, area, citing their lack of profitability in a tough competitive climate.
The move will affect some 660 employees.
The company currently operates 39 Food Town stores, said it is considering the sale of the remaining 26 stores to other grocery operators or converting them to other formats.
“We will begin to phase out full time operations beginning today, with a planned closure by the end of March,” the company said in an internal memo. “We will continue to staff and operate these stores as we phase out operations.
“We regret having to make this difficult decision, but it is necessary to help expedite the process of returning our retail operations to profitability. We have taken this step as a last resort after careful evaluation of all possible options and we greatly appreciate the efforts and loyalty of the effected associates. We continue to review the other options for the remaining 26 Food Town stores and expect to reach a final decision before the close of our fourth quarter ending March 29, 2003.”
The 13 stores being closed generate approximately $110 million in annual retail sales. The company plans to take a non-cash pretax charge of $10 million to $12 million during the fourth quarter.
The move will affect some 660 employees.
The company currently operates 39 Food Town stores, said it is considering the sale of the remaining 26 stores to other grocery operators or converting them to other formats.
“We will begin to phase out full time operations beginning today, with a planned closure by the end of March,” the company said in an internal memo. “We will continue to staff and operate these stores as we phase out operations.
“We regret having to make this difficult decision, but it is necessary to help expedite the process of returning our retail operations to profitability. We have taken this step as a last resort after careful evaluation of all possible options and we greatly appreciate the efforts and loyalty of the effected associates. We continue to review the other options for the remaining 26 Food Town stores and expect to reach a final decision before the close of our fourth quarter ending March 29, 2003.”
The 13 stores being closed generate approximately $110 million in annual retail sales. The company plans to take a non-cash pretax charge of $10 million to $12 million during the fourth quarter.
- KC's View:
- The wolves ate the baby. (See yesterday’s Spartan commentary, available in the MNB Archives.)
