INDIANAPOLIS -- The fried chicken at Village Pantry convenience stores eventually will go off the menu. The Marsh Supermarket will shrink in size and may offer fewer brands of nonperishable goods. But it still will be the place to go for grapefruits, cabbages or pork loins.
That's the recovery plan that Bill Marsh, the struggling grocery and convenience store chain's new president and CEO, outlined Wednesday, a day after the company reported its second straight quarterly loss, reported The Indianapolis Star. Under the new plan, Marsh Supermarkets will [image-nocss] abandon its turf war with Wal-Mart Supercenter and Super Target and focus on smaller stores and merchandise, such as bakery, milk, meat, deli items and vegetables, the report said.
The company, which surprised customers and employees in November when it announced it might put itself up for sale, has been closing stores and recently fired four top executives.
We can achieve what the customer wants with less overhead, less space and, at the end of the day, more convenience, Marsh said.
The company, which owns Village Pantry c-stores, Lo-Bill discount food stores and other grocery outlets, will roll out its revamped concept in the next two years at newer locations, officials told the newspaper. Of the company's existing stores, just a few will be renovated and slimmed down. The company said it's exploring other real estate and might move its current stores into smaller buildings. The company owns the real estate and buildings for 34 supermarkets and 44 c-stores.
Industry experts say it is a good survival strategy in a world where discount giants and specialty stores such as Target and Wild Oats are squeezing regional chains. We are emphasizing what we are the strongest at, Douglas Dougherty, Marsh's CFO, told the Star.
The new strategy will help the company trim expenses, officials said. Declining same-store sales, quarterly losses and dipping cash flow have been plaguing the company in recent quarters. Marsh, which Tuesday announced a third-quarter loss of $9.6 million, has had three straight years of declining same-store sales.
Of the $9.6 million, $8.4 million is a noncash impairment charge, related to money the company spent a long time ago on real estate, Dougherty said.
Yet the company said it is not facing serious financial trouble. We are not in a financial quagmire, Dougherty said.
Marsh declined to comment on potential suitors, but said it still is pursuing strategic alternatives. Officials said, however, that selling the company in chunks is not an option they are exploring.
Some analysts said the company is not yet on the path of overcoming its financial woes, which could make a sale difficult. The company has $200 million worth of debt on its balance sheet. The debt includes a $113 million bond set to mature in August 2007, which Marsh officials say they are confident they can refinance. Marsh has another $95 million senior secured revolving credit agreement set to expire in November 2010 and a $25 million loan, with a deadline of less than two years to refinance. Marsh put 14 of its properties valued at $131 million as collateral for the two loans.
For now, though, the company is concentrating on taking baby steps toward the smaller stores. It's like what Clint Eastwood said, Marsh said. A man's got to know his limitations. But we are not dead.
As reported in CSP Daily News, the Indianapolis-based chain announced plans this week to close the Marsh Supermarket in Fort Wayne, Ind., the Savin*$ Store in Muncie, Ind., six Village Pantry c-stores (four in Indianapolis and two in Anderson, Ind.) and the Trios Di Tuscanos restaurant in Noblesville, Ind., by the end of the month as part of an effort to save about $12 million.
The board elected William L. Marsh interim president and COO. It also announced a reduction in force of approximately 25 employees at the headquarters office, including four officers: David A. Marsh, president and COO; Arthur Marsh, executive vice president of mergers and acquisitions; Don Marsh Jr., vice president of specialty procurement; and Joseph Heerens, senior vice president of political affairs.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.