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    Pathmark Promises Departure With New Prototype

    CARTERET, N.J. -- Pathmark Stores executives here said plans are "coming together" for a new prototype store that would "look and feel much different" from what the standard Pathmark unit is today, and that certain features of the prototype concept would be incorporated into existing stores starting next year.

    CARTERET, N.J. -- Pathmark Stores executives here said plans are "coming together" for a new prototype store that would "look and feel much different" from what the standard Pathmark unit is today, and that certain features of the prototype concept would be incorporated into existing stores starting next year.

    The executives spoke about the prototype during a conference call with analysts. The chain yesterday also posted a smaller loss than analysts had expected for its third quarter of fiscal 2006: a net loss of $5.8 million, or 11 cents per share, during the quarter, vs. a loss of $18.3 million, or 36 cents per diluted share, last year.

    Sales for the quarter, ended Oct. 28, 2006, were $978.1 million, a decrease of 0.3 percent from $980.5 million in the year-ago period. Same-store sales were flat in the quarter, the Mid-Atlantic retailer said

    "I am pleased with the progress we made this quarter," said Pathmark c.e.o. John Standley in a statement. "Gross margins improved from the prior year in large part because of the merchandising initiatives that we have been working on for the past year, as well as lower shrink expense. Additionally, our expense reduction initiatives and the outstanding work of our store teams allowed us to better control expenses."

    Co-president and chief marketing and merchandising officer Ken Martindale said during the conference call that the first prototype store would open late next year. Beyond the comments about the prototype representing a significant departures from current stores, he declined to share any further specifics.

    Of the quarter just passed, Martindale noted that the performance of produce outpaced every other category, thanks to Pathmark's aggressive remerchandising initiative, which is now being rolled out to the seafood department. Martindale said he was confident that sales would pick up in other sections as the program continues to expand throughout the store.

    The retailer's recent agreements with Wild Oats and Topco to carry their respective controlled brands also came up during the call, with Pathmark execs extolling the advantages of the "great products and speed to market" inherent in the deals. Topco's private label Valu Time and Top Care brands are set to hit Pathmark shelves after the first of the year, the executives said.

    The company officials declined to comment on speculation regarding a possible merger with market competitor A&P or any other supermarket operator.

    Pathmark said capital expenditures during the first nine months of fiscal 2006 amounted to $59.8 million, while cap ex for fiscal 2006 are expected to be about $70 million. It said it completed 13 store renovations during the first nine months of fiscal 2006, and expects to complete one store renovation during the fourth quarter.

    Pathmark operates 141 supermarkets, mainly in the New York-New Jersey and Philadelphia metro areas.

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