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INDIANAPOLIS -- Marsh Supermarkets here took additional major steps in its ongoing restructuring, with the latest finding the regional retailer removing some top executives who are also members of the Marsh family, and closing eight stores and a restaurant.
The expected changes will result in a savings of $12 million annually, according to the company's 10-member board of directors.
Among the departing Marsh family members are president David Marsh, and three v.p.'s who are sons or sons-in-law of longtime c.e.o. Don Marsh: Arthur Marsh, e.v.p., mergers and acquisitions; Don Marsh Jr., v.p., specialty procurement; and Joseph Heerens, s.v.p., political affairs.
David Marsh will be replaced by his uncle, William L. Marsh, who was named interim president and c.o.o. Bill Marsh has served as a director of the company since 1991 and as s.v.p., property management since August 1997. He has been employed by the company in various supervisory and executive capacities since 1974.
In addition to the four Marsh executives, the company will also eliminate approximately 20 other employees at the chain's headquarters office.
In a statement Marsh's board of directors said: "We believe the changes in management are critical to the company's transformation. We would like to thank each of the executives for their prior contributions to the company and wish them well in their future endeavors."
In addition to the staff reduction, Marsh will reduce travel and overhead at the headquarters and close the Marsh Supermarket in Fort Wayne, Ind.; the Savin*$ Store in Muncie, Ind.; six Village Pantry convenience stores (four in Indianapolis and two in Anderson, Ind.) and the Trios Di Tuscanos restaurant in Noblesville, Ind. by the end of the month.
The latest moves follow Marsh's earlier announcement to terminate the supplemental executive retirement plans that will reduce expenses by $3 million to $4 million annually.
"This is a time when the company's management needs to focus their efforts on restructuring the company's operations, reducing costs, and improving profitability," the board statement notes. "We recognize that these efforts will require sacrifices at many levels, and it is important that the company's management lead the way."
Noting that a review of the company's store base and expense structure will continue, the company expects to incur a fourth-quarter charge for future cash expenditures of $5.8 million to $6.8 million, related to the reduction of jobs at the company's headquarters.
Upon the closing of the stores, Marsh is expected to record an additional charge for future cash expenditures of $6 million to $10 million ($3.9 million to $6.5 million net of tax), primarily related to future lease payments. The company will also record a noncash impairment charge in the third quarter of approximately $12.8 million before tax ($8.4 million after tax). The charges are related to the stores to be closed, as well as other store locations, which will bring the book value of these assets in line with their fair market value, as well as account for differences between future lease payments and expected subleases.
This major restructuring announcement follows a steady stream of similar efforts to improve profitability that got underway in November 2005, when Marsh revealed it was seeking "strategic alternatives," including a possible sale.
Marsh currently operates 69 Marsh supermarkets, 38 LoBill Food Stores, eight O'Malia's Food Markets and 154 Village Pantry stores in Indiana and Ohio.