US: Fairway CEO retires as losses continue
Shares in Fairway Group Holdings Corp took a hammering in pre-market trade today (7 February), after CEO Herbert Ruetsch announced his retirement and the US retailer reported another quarter of losses.
Ruetsch has worked at Fairway for 15 years, including the last two as chief executive. During this time, he oversaw Fairways listing on the NASDAQ in April.
The group's president, William Sanford, will serve as interim CEO until a replacement is appointed.
Separately, in its quarterly update released late yesterday, Fairway reported a net loss of $31.3m for the three months to 29 December. A year earlier it took a loss of $51.8m.
Shares in Fairway plummeted in pre-market trading, dropping 24.15% as the market reacted negatively to another quarter of losses. The stock rallied somewhat in early trade, rising 2.60% by 8.50 in New York.
The company did, however, grow its adjusted operating profit in the period. Fairway slowed its investments in stores openings and adjusted EBITDA rose from $12.4m last year to $12.8m this year.
Net sales increased 22.9% to US$205.7m in the three months to end-December. Gains were driven by a near-30% rise in footfall and the company said progress was made on its strategy to increase private label as a proportion of total sales.
Fairway executive chairman Charles Santoro remained upbeat on the group's long-term growth potential. "Fairway's differentiated food retail platform remains well positioned to capture incremental market share as we continue to expand our store base and capitalize on the shifting consumer focus towards healthy living and value," he said.
Fairway Group Holdings Corp. Announces Management Changes and Promotions
NEW YORK, Feb. 6, 2014 -- /PRNewswire/ -- Fairway Group Holdings Corp. ("Fairway") (NASDAQ: FWM) announced today that Chief Executive Officer Herbert Ruetsch will retire after fifteen years with the company, including the last two years as Chief Executive Officer. Mr. Ruetsch will remain a special advisor to the company and continue to provide input into certain merchandising and product initiatives. Mr. William Sanford, President of Fairway, will assume the role of Fairway's Interim Chief Executive Officer.
Charles Santoro, Executive Chairman of Fairway, stated, "Herb Ruetsch has helped lead Fairway through a major transformation from a small family business into an iconic, growing specialty food retailer serving some 20 million customer visits annually in the tri-state area. All of us at Fairway would like to thank Herb for his many contributions to our success."
He added that, "Bill Sanford, our Interim Chief Executive Officer, brings continuity, strong leadership and organizational skills, and has also played a very important role in Fairway's growth,development and success over his last five years at Fairway, including his previous roles as Chief Financial Officer and most recently as President."
Fairway also announced the promotions of Kevin McDonnell to Co-President and Chief Operating Officer and Edward Arditte to Co-President and Chief Financial Officer.
Mr. Santoro continued, "Kevin and Ed work very closely together and these promotions are designed to bolster and enhance operations and productivity initiatives as Fairway prepares to roll out its production center and important new store openings later this calendar year. Kevin has worked at Fairway for the past six years and has more than 30 years of experience in food retailing. Kevin will be responsible for all merchandising and store operations and Ed will assume responsibility for all other corporate functions. We believe that our senior leadership team is extraordinarily strong, focused and determined and that these changes help take us to the next level in our organization's growth and in enhancing our ability to execute to very demanding goals."
Fairway's Board of Directors will commence a Chief Executive Officer search shortly, and will consider qualified individuals, both inside and outside of Fairway, who possess the leadership, merchandising and organizational skills complementary to our long term goals and opportunities.
About Messrs. Sanford, McDonnell and Arditte
William E. Sanford has served as Fairway's President since April 2012. He joined the company in October 2008 as Chief Administrative Officer and served as Chief Financial Officer from September 2011 to December 2012. From 1998 to June 2008, he held various senior positions, including Chief Financial Officer, President and Chief Operating Officer with Interline Brands, Inc., a New York Stock Exchange listed company. He has over 25 years of experience in the wholesale distribution field, having also held senior positions with Airgas and MSC Industrial Direct.
Kevin B. McDonnell has served as Fairway's Senior Vice President-Chief Operating Officer since April 2012. Prior to this, he was Chief Merchandising Officer from August 2007 to April 2012. Previously, he served in various capacities at The Great Atlantic & Pacific Tea Company for over 27 years, most recently as Senior Vice President of Sales and Merchandising.
Edward C. Arditte has served as Executive Vice President and Chief Financial Officer of Fairway since December 2012. He has over 25 years of finance and operating experience with large, multi-industry companies including Tyco International Ltd., where he served from May 2003 to May 2010 as a Senior Vice President with responsibility for strategy, investor relations and communications. Immediately prior to joining Tyco International, he served as the Chief Financial Officer of BancBoston Capital. He also spent 16 years at Textron Inc., where he served in a variety of management roles including Vice President & Treasurer and Chief Financial Officer of a major operating division.
Original source: Fairway Group Holdings Corp
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