GRAND RAPIDS, Mich. - The disappearance of two former competitors helped boost quarterly earnings by more than 36% and sales by 15.2% at Spartan Stores here.
One of the former competitors, D&W Food Centers, was acquired by Spartan earlier this year, and during the quarter its 16 locations provided $46 million in new sales for Spartan. Another competing chain, Carter's Food Centers, declared Chapter 7 bankruptcy this summer and subsequently liquidated.
Spartan acquired four of the former Carter's stores for their inventory and equipment, but the company has no plans at this time to reopen them, Craig Sturken, chief executive officer of Spartan, told analysts in a conference call last week.
Spartan has converted six of the D&W stores it acquired to the Family Fare banner. "These stores have responded very well to the format change," Sturken said.
Spartan applied its category management practices and reintroduced private brands at the remaining D&W stores. Merchandising resets and physical improvements have been completed at several of the locations, with others scheduled over the coming year.
"We believe that the performance of these stores has now stabilized and we expect their performance to continually improve during the next 12 to 18 months," Sturken said.
Spartan reported net earnings of $9.3 million, or 44 cents per share, on total sales of $559.4 million for its fiscal second quarter, which ended Sept. 9. Same-store sales were up 6.4% in the 12-week period, or 2.9% excluding gasoline.
Distribution sales rose 6.8% to $281.5 million from new customers and increased sales to existing customers. Retail sales climbed 25.3% to $277.9 million.