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GRAND RAPIDS, Mich. - Spartan Stores, Inc. announced today that it will be closing 13 under-performing Food Town retail grocery stores principally located in the Toledo, Ohio and outlying areas. The decision to close the stores was one of the options considered by the company for its 39 Food Town retail grocery stores under its previously announced strategic evaluation process.
The options being considered for the remaining 26 Food Town stores include a sale to other retail grocery operators and/or the conversion of select stores to other formats, the company said.
The 13 stores generate approximately $110 million in annual retail sales. Spartan said it expects to record a non-cash pretax charge of between $10 and $12 million in connection with the closings during the fourth quarter. The company also anticipates an improvement in operating profit and cash from operations upon completion of the closings.
"The store closings will allow us to better focus management's efforts and capital on key strategic markets where we have the strongest growth and value creation opportunities," said chairman James B. Meyer. "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 affected associates."
Meyer said he expects the company to reach a final decision for the remaining stores before the close of its fourth quarter ending March 29, 2003.
"Excess retail grocery store capacity in the Toledo area market has made it difficult for many grocery operators to maintain profitable operations," said Mr. Craig C. Sturken, Spartan Stores' president and CEO. "The decision to close the stores will help to strengthen our overall competitive retail market position."
Spartan Stores owns and operates 94 supermarkets and 21 deep-discount drug stores in Michigan and Ohio. The company also distributes more than 40,000 private-label and national brand products to more than 330 independent grocery stores and serves as a wholesale distributor to 6,600 convenience stores.