USA: Great Atlantic & Pacific Tea Co to restructure after sales fall
US grocery chain, the Great Atlantic & Pacific Tea Company (A&P) has announced reduced sales for the fourth quarter and full year ended 26 February along with a restructuring plan.
Sales for the 52 weeks of fiscal 2004 totalled $10.85bn compared with $10.90bn for the 53 week period in 2003.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) for Fiscal 2004 were $195m compared to $132m for 2003.
Sales for the 12 week fourth quarter of fiscal 2004 ended February 26, 2005 were $2.56bn, compared to $2.72b for the year earlier period. EBITDA for the quarter totaled $76m compared to $14m for the comparable period last year.
"Our significant improvement in the fourth quarter was produced by the sales and profit growth of A&P Canada, driven by our "Fresh Obsessed" food marketing initiatives and the disciplined execution of our discount Food Basics operations; stronger sales and significant bottom line improvement in the US, set in motion by our reorganization of the US business implemented last November, and our continued emphasis on cost management throughout the organization," said chairman and CEO Christian Haub.
"All of those factors contributed to our Company's best quarterly performance in almost three years, and successfully concluded a year of solid progress toward our goal of sustainable profitability," Mr. Haub said.
The company also announced plans for a major strategic restructuring including the contemplated sale of A&P Canada, the divestiture of its Midwest operations, and a strategic, operational and financial repositioning of the company around its core operations in the broad corridor from Connecticut to Washington DC.
"The strong performance of A&P Canada, the continued progress of our U.S. operations, and our rigorous management of expenses and liquidity companywide all contributed to improved results and greater financial stability in our fourth quarter and full year," said Haub. "We also acted to accelerate our progress in the US with a previously announced management reorganization aimed at sharpening our merchandising and operational execution while improving our cost structure."
"The strategic, operational and financial steps we are taking are aimed at unlocking the value of our Canadian operations and building the value of A&P for the benefit of all of the company's shareholders," he said.
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