NORTHLAKE, Ill. -- Dominick's Supermarkets here said last week it expects to complete the conversions of 13 of its 17 Omni stores to the Dominick's Fresh Stores banner by late summer.
Sales at the 17 former Omni stores are expected to turn positive within a year after the remodeling has been completed.
Robert A. Mariano, chairman and chief executive officer, said the company ultimately anticipates increases of more than 10% at the converted Omni stores.
However, the initial effect, as anticipated, has been negative, Mariano said, with sales declines averaging 25% since the stores' name was changed from Omni to Dominick's in mid-October.
"Sales are running below expectations right now, though we're not drawing any conclusions from that, and we believe we will see increases after we begin our remodeling activity," Mariano said.
The conversion plan is on schedule, he pointed out, as the company initially focuses its efforts on establishing the basic Dominick's service departments and adding more private-label products at the former Omnis.
"We'll begin more full-scale remodeling after the holidays," he said.
The company discussed its plans for the Omnis following the release last week of financial results for the year and fourth quarter ended Nov. 1.
Sales for the 52-week year rose to a record level of $2.6 billion, or a gain of 2.9% over last year's 53-week period, while sales for the 12-week fourth quarter fell 4.4% to $584.8 million because of the extra week last year; excluding that week, the company said, sales would have risen 4.9% for the year and 3.7% for the quarter.
Overall comparable-store sales fell 0.1% for the year and declined 2.9% for the quarter -- which the company said was due to lower sales at the former Omnis.
For the Dominick's stores that had not been Omnis, comparable-store sales rose 1.5% for the year and 2.3% for the quarter.
The company said it will not include the former Omni units in its comparable-store comparisons in future financial reports, until the conversions have been completed. The company said operating cash flow achieved record levels, rising 9.7% for the year to $158.5 million, or 6.1% of sales, and 17.5% for the quarter to $37.3 million, or 6.4% of sales. Dominick's said it had a net loss of $62.5 million, or $2.93 per share, for the year, and a net loss of $77.2 million, or $3.61 per share, for the quarter. The loss included a fourth-quarter nonrecurring after-tax charge of $81.9 million, or $3.83 per share, which encompassed a restructuring charge of $58.3 million related to conversion of the Omni stores to Dominick's and an extraordinary loss of $23.6 million on early extinguishment of debt related to a successful tender offer for the company's 10-7/8% senior subordinated notes.
Qtr Ended 11/1/97 11/2/96
Sales $584.8 million $611.4 million
Change - 4.4%
Same-store - 2.9%
Net Income ($77.2 million) ($12.7 million)
Inc/share ($3.61) (82 cents)
52 Weeks 1997 1996
Sales $2.6 billion $2.5 billion
Change + 2.9%
Same-store - 0.1%
Net Income ($62.5 million) ($14.9 million)
Inc/Share ($2.93) (96 cents)
Fiscal 1997 was a 52-week year with a 12-week fourth quarter, while fiscal 1996 was a 53-week year with a 13-week fourth quarter.