Greg Mays has taken over for Ron Burkle as chairman of A&P. Mays is a former A&P board member and a longtime executive with ties to Burkle’s Yucaipa Cos., which owns the struggling retailer. Sam Martin remains A&P’s chief executive.
The news became public when Mays appeared at a meeting with union leaders March 21. He and other company executives in attendance said the company was starting to show improvement, including positive cash flow. The company has not released financial results from their fiscal year ended in February.
Mays had served as chairman and CEO of Source Interlink Companies, also owned by Yucaipa Cos., since October 2008. He also served as chairman and CEO of Wild Oats, which was subsequently acquired by Whole Foods in September of 2007. And, Mays had a stint with another Yucaipa/Burkle company, Pathmark.
In the meeting last month, UFCW Local 464A President John T. Niccollai and representatives from the 11 other unions holding collective bargaining agreements with A&P owned stores, met with Mays and other top executives. In addition to the introduction of Mays as new company chairman, it was officially announced that Mike Mills has been appointed to replace Tom O’Boyle as head of merchandising. Mills discussed implementing new programs dealing with pricing, computer generated ordering, shrink programs and profit margins.
The majority of the meeting was devoted to a discussion of membership problems and the need to win back the concessions lost through the bankruptcy court. Niccollai, who spoke during the three hour meeting, emphasized to A&P officials that, if conditions are improving at A&P, “We need to discuss the elimination of the concessions forced upon us.”
A&P responded that it needs to make capital improvements by putting money into store and rest room renovation if, in fact, profitability is to be achieved.
According to reports from the meeting, company executives tried to give the impression that the current operators of A&P are here for the long haul.
In summarizing his impression of the meeting, Niccollai stated, “The meeting should be viewed as positive in nature, but more than ever we need to be prepared for all options including, at some point, the sale of the company in whole or in part.”
In other A&P news, the struggling retailer continues to seek a buyer for itsManhattanbased Food Emporium, but has been unable to complete a single-buyer deal for the 16-store chain. Recently, it announced it will sell two of those stores (at 2008 Broadway and475 6th Avenue) to private equity investment real estate firm Madison Capital. That deal is expected to close in May and both stores are expected to be closed prior to the transfer.
That deal is part of a larger plan to sell and/or leaseback certain properties which the retailer believes will generate about $130 million. Thus far, only four other units – Pathmarks in Clifton, NJ and the Inwood section of Manhattan and A&P units in Clifton,NJ and Briarcliff Manor,NY- have been affected, raising about $25.8 million in proceeds. Those stores will continue to operate under their current banners.
“This opportunity to unlock substantial real estate value from some of our owned and leased properties will provide additional liquidity as we continue to execute on our strategic initiatives and invest in our stores for growth,” said Martin in a statement.