US: The Fresh Market to close stores, focus expansion
US retailer The Fresh Market has said it would close four stores and focus expansion on select markets in the next 12 months, announcements that sent its shares soaring this morning (7 March).
The Fresh Market, which has 156 outlets in 26 US states, said it would shut four stores - three in Sacramento in California and one in Texas.
It said it had undertaken "extensive analysis of expected future cash flows, the long-term strategic impact of individual stores and the capital and resources allocated to them". The outlets will be closed within the next week.
The closures are part of a wider review by The Fresh Market's management. It said it would "place a greater emphasis on existing market expansion" and "slow the pace of openings in frontier markets in the near- to medium-term".
"The company believes that a greater number of new store opportunities exist in markets east of the Mississippi River," it said. In its fiscal 2014/15 year, which started on 27 January, The Fresh Market plans to open 23 to 25 stores, it said. The retailer opened 20 in its last financial year.
The Fresh Market has also looked at his costs and has "identified a number of opportunities to better manage costs and improve efficiencies that it believes will not sacrifice customer service or corporate productivity". These savings will keep fiscal 2014 pre-opening expenses at the same level as fiscal 2013, The Fresh Market said.
Shares in The Fresh Market, which made the announcements after the closing bell in New York yesterday (6 March), were up 5.16% at US$35.76.
Alongside the news on stores, The Fresh Market reported lower annual earnings on the back of a drop in fourth-quarter profits, which missed analyst forecasts.
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