Great Atlantic & Pacific Tea Co. (GAP), owner of the A&P supermarket chain, may sell its Food Emporium stores as the 151-year-old company continues to try to turn around its finances by cutting costs and revamping leadership.

The Montvale, New Jersey-based company is considering selling the New York-area chain in an effort to generate cash. It has hired investment bank Peter J. Solomon to find potential buyers, the Wall Street Journal reported earlier today, citing people familiar with the process. Private-equity firms Angelo Gordon & Co. and Sterling Investment Partners are among potential buyers of the chain, which could fetch more than $200 million, the Journal reported.

A&P, which was founded in 1859 and has 48,000 employees, is among a group of old-line supermarket chains that have been beset by the combination of growing competition from both higher-end grocery companies such as Whole Foods and general retailers like Wal-Mart Stores (WMT), which has expanded its food offerings.

Great Atlantic's Turnaround

Last month, Great Atlantic, which has 429 stores in eight states, said it would close 25 stores this year as part of its efforts to help cut its losses. For the quarter ended June 19, Great Atlantic's loss widened 88% to $122.6 million after same-store sales declined 7.2%. The company's cash balance was down 32% from the previous quarter to $171 million.

Competing supermarket chain Supervalu (SVU) same-store sales also fell 7.2% for its most recently-completed quarter, while Safeway's (SWY) second-quarter comparable store sales were down 2.5%.

"Other companies have come into the marketplace that have addressed the needs of American shoppers," said Harry Balzer, chief industry analyst at NPD Group. In order to compete, companies like Great Atlantic must either invest in new ways to attract shoppers or cut prices.

The potential sale of Food Emporium, which has 17 stores in New York City and one in New Canaan, Connecticut, would be part of a turnaround effort Great Atlantic began when it hired former Wild Oats Chief Operating Officer Sam Martin to succeed Ron Marshall as president and CEO in late July. The company said at the time that it would try to cut operating costs, secure additional financing and boost its cash balance.

Representatives for Great Atlantic, whose chains also include Waldbaum's, Pathmark and Best Cellars, didn't immediately respond to a request for comment today.


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yesfred

I worked at an A&P in New Jersey, as a checker, 41 years ago when I was a high school kid. They were doing the same bootstrapping to save money then, as they are now. In fact, this article is almost a carbon-copy (there's a 60s term for you) of the ones published back then. The management is different, but the condition is just the same. Can you say "Zombie Company?"

September 05 2010 at 9:54 PM Report abuse rate up rate down Reply
janicedunkin

WE love Wal-Mart. Free market says compete or get out. No body ever went downtown any way so what does it matter???

September 05 2010 at 5:42 PM Report abuse rate up rate down Reply
thecr0w45

i hope safeway isn't allowed to get this company. they ruined all the companies they touch and expect employees to work for free or make the job their life.

September 05 2010 at 8:45 AM Report abuse rate up rate down Reply
honey/vinegar

I do wish they would bring back the old school A&P spice cake. I would drive to NJ or NY to buy a case. Think about how many baby boomers grew up with this in their brown bagged lunches and would jump at the chance to purchase a few cakes. Just saying!

September 03 2010 at 7:04 AM Report abuse +1 rate up rate down Reply
1 reply to honey/vinegar's comment
honey/vinegar

My point is, companies need to listen to what the public wants, supply their needs at a reasonable price and WOW, you would have a thriving business. I don't understand what the problem is, except for maybe pure greed. Same with our reps in Washington D.C. I don't want to seem to make this a political issue, but come on....it's very simple. Get back to what worked in the past, then everyone wins.

September 03 2010 at 7:20 AM Report abuse +2 rate up rate down Reply
chris36m

Never hear of them

September 03 2010 at 6:17 AM Report abuse rate up rate down Reply
wsa999

Walmart should be next. Give Mom and Pop back to us.

September 03 2010 at 4:40 AM Report abuse +1 rate up rate down Reply
Jeff

ACME should be next. Super fresh super expensive, worst of them all.

September 03 2010 at 3:50 AM Report abuse +1 rate up rate down Reply
ruthsgardens

This is a classic example of corporate america.And is mirrored by whatever companies are still left in america today.During the great depression we had rich and poor.American workers began to utilize their right under federal law to unionize for better wages,pensions and benefits.Working americans had a little more money then to save,spend and invest.Banks grew larger,companies prospered because americans were buying more of their products.Americans invested in their own companies and others making them prosper and expand and create more jobs.Factories were built creating everything americans needed.And america grew to be the richest,most powerfullest nation on earth.What happened?The rule of thumb for companies has always been to set aside 10% for labor costs.Labor costs and legacies have always been an owners biggest expense.When american workers unionized,they asked the owner for that 10%.The american workers voted how much of that would go to wages,pensions, healthcare and benefits and insurance.They signed a contract with the owners and was legal and binding.It listed what was required of the workers by the owner and if all requirements were not met,that the workers would be found in breech of contract and have to pay for all shortcomings.And this worked great for 50 years or so.What happened?What happened is the companies got to big for the owner to run so he created a board of directors.When it became to large for the board of directors to run, they hired outside firms.Corporate America.That is where the pirahnas were turned loose.Corporate america is comprised of ceos,management,management and consultant firms,lawyers and lawyer groups who also form investment groups.At this point most owners and boards lose all say in the decision making process.They also lose 35% of their profits.Along with the 10% for the american workers means the owner and board pocket 55%.Corporate america offers the owner a corp. status and utilization of corp. tax loopholes.Depending on the status the taxpayers and shareholders pay the corp.tax.They also pay the labor in credit,which protects the profit for the owner and theirselves.So in the case of a loss or a company folding,the american workers lose everything first.So with these weapons and millions in hand they crush the unions first.There are a lot of non-union workers out there that have been blaming the unions for their jobs going overseas.It is an eye opener when corporate america does this to a non-union company isn't it?First they cut your wages as close to minimum wage as possible without a revolt.Cut out all overtime.Cut hours to make employees part-time which saves them paying pensions or benefits.Then they sell the company to the financial consultant groups or investment groups or lawyer groups.All are lawyers anyway.Just like the people who buy your credit card debt.They then tell you take more of a cut in pay and give up half or all of your pension if you got one and then move overseas or sell to someone overseas who would be glad to fill those vacancies with 3rd world cheap labor.I forgot to mention most of the lobbyists,both parties in congress and presidents along with the trade agreements that are allowing this to happen.Now do you understand?

September 03 2010 at 3:26 AM Report abuse rate up rate down Reply
2 replies to ruthsgardens's comment
honey/vinegar

I worked for a company for 13 years, best company ever. I would still be there except for the fact I became ill and had to go on diability. When I left I was making $18.50 per hour(pretty good for someone without a college degree who lives in the midwest)after starting out at $7.00 per hour. We had unlimited overtime, 3 weeks paid vacation per year, medical, dental, 401k where the company matched 50 cents on the dollar. They provided a life insurance policy free of charge, company picnics...catered by one of the finest restaurants in the area, onsite child care and gym, I could go on and on. They knew their employees buttered their bread and treated us like gold. Needless to say, they are still thriving and rated as one of the best companies in Ohio. A union rep was hired, purely by accident, and wanted us to unionize. Well, that didn't fly with the employees and soon he was chased away. Point is, maybe the unions do more harm than good. I know in Ohio, when the unions got a foothold in the rubber companies and the owners could no longer keep up with their demands, the companies shut down and moved south where there are very few unions. There went the jobs! Now, thanks in part to the unions, Ohio is the poorest state, right along with Michigan...which had the same problem. So much for the glorious unions!

September 03 2010 at 7:39 AM Report abuse rate up rate down Reply
walliabear82

ok... so is this really news to anyone? the company has been struggling for a while and they obviously cant run a business. The CEO needs to step down and hand the company over to a more capable person, before they close more stores down and more people loose there jobs, the economy is bad enough and the CEO and other higher up im sure haven't taken a pay cut or even thought about the jobs they will me cutting, all they think about are the numbers not the people.

September 03 2010 at 3:23 AM Report abuse +2 rate up rate down Reply
NANCY

JACK GROW UP !!!

September 03 2010 at 3:00 AM Report abuse rate up rate down Reply
1 reply to NANCY's comment
JackPierides

**** YOU NANCY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

September 03 2010 at 8:42 AM Report abuse rate up rate down Reply