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Update: A&P Explores Possible Sale

MONTVALE, N.J. — A&P here has begun seeking strategic alternatives, including a possible sale, according to reports Friday.

Jon Springer, Executive Editor

July 26, 2013

2 Min Read
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MONTVALE, N.J. — A&P has engaged Credit Suisse to explore strategic alternatives including a possible sale, the company told its employees this week.

According to A&P chairman Greg Mays, the parent of the A&P, Pathmark and Food Emporium chains is seeking capital for new investment.

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“The capital raise effort will include but not be limited to: (1) raising new capital from investors; (2) considering new business partner relationships; (3) potentially re-financing the company to meet our growth expectations; and (4) under the right circumstances, considering a sale of the company,” Mays said in a memorandum distributed to employees this week.

“Our goal is to ensure that the company is well-positioned for future success that will benefit A&P, our associates, partners, suppliers and customers — and we will ultimately pursue what is the best possible course for all constituents,” the memo continued. “Indeed, it is possible we will decide not to pursue any of these alternatives and will instead choose to simply capitalize our growth plan at a slower pace from internal free cash flow. While it's premature to speculate on the exact outcome of the strategic review process, we want to be clear that this financial initiative is the first step toward building a stronger future for our business.

The Wall Street Journal reported that A&P could seek $1 billion or more in a sale.

Mays said efforts to improve efficiency and reduce debt at the retailer have helped to significantly strengthen its balance sheet, but the company is still losing money. A&P last year emerged from a lengthy stay in Chapter 11 bankruptcy protection during which it slashed labor and supply costs and expenses for dark stores. It has since raised cash through store sales and sale-leasebacks, but has continued to close money-losing stores.

A&P emerged from bankruptcy last year and operates about 300 stores in the Northeast.

 

About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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