A&P CEO leaves as Q2 loss widens
MONTVALE, N.J. A&P has announced the departure of president and CEO Eric Claus. The news came as the company posted a wider net loss for the second quarter and a dip in sales.
Christian Haub, executive chairman of the board, has reassumed the CEO duties, a position he held from 1998 to 2005, while the company searches for a successor.
“The current challenging economy continues to impact our business. The macro headwinds, including rising unemployment, intensifying price competition and now also deflation, are creating an even more difficult short-term economic environment,” Haub stated. “Nonetheless, we have made progress in several of our formats and many of our initiatives.”
Sales for the second quarter ended Sept. 12 were $2.1 billion, compared with $2.2 billion in the year-ago period. Same-store sales dropped 3.8%.
Reported loss from continuing operations was $62.2 million, compared with a loss of $4.3 million last year, which includes a $50 million increase in non-cash mark to market adjustments related to financial liabilities. Total net loss for the quarter was $80.3 million, or down $3.74 per diluted share, compared with a loss of $18.1 million, or a decrease of $1.97 per diluted share, in the year-ago period.
Haub noted that securing more than $400 million in new funds “was clearly done at the right time to ensure that we have the resources to address future debt maturities and to invest in our optimization strategies.”
MoneyGram renews deal with Duane Reade
MINNEAPOLIS MoneyGram, a provider of payment services, has renewed its agreement with Duane Reade, the company announced on Monday.
As part of the multi-year agreement, MoneyGram introduced Utility Bill Payment services at Duane Reade locations that already offer MoneyGram money transfers, money orders and ExpressPayment services for urgent bill payment and reload options for prepaid debit cards.
MoneyGram services are available in about 200 Duane Reade stores throughout New York City and in parts of New Jersey.
Pfizer returns to consumer care with Wyeth buy
NEW YORK What’s really intriguing behind the return of a consumer division to Pfizer is the fact that two of its flagship pharmaceuticals — Lipitor and Viagra — are approaching patent expiration, and both have been suggested as possible Rx-to-OTC switch candidates by Kline & Co.
Why Lipitor might hit the switch sweet-spot: Of all the statins, Lipitor certainly looms largest, and a lot of that has to do with the greater perceived efficacy achieved through Pfizer’s statin (second only to Crestor, according to the Johns Hopkins Medical Letter). Pfizer also will benefit from the experiences of four prior statin switch applications, all of which failed on some level with failed actual use studies. In addition, while there is no class of behind-the-counter drugs, there certainly is precedent for OTC marketing agreements that place a drug behind the pharmacy counter — the emergency contraceptive Plan B, for example. That opens the door to a marketing agreement that would facilitate a pharmacy consultation as a prevention against possible consumer misuse. Though, to be clear, Pfizer has never indicated such a possibility in switching Lipitor.
Why Viagra might hit the switch sweet-spot: While certainly a long-shot in a society where the switch of an emergency contraceptive became a political hot potato, and advertisements around the use of condoms as pleasure enhancement, as opposed to their STD-prevention qualities, are not likely to ever see the light of network prime time, Viagra was sold on a test-market basis in the United Kingdom as a behind-the-counter offering, which requires a pharmacist consultation. If Pfizer can figure out how to open the door around a defacto BTC class of drugs with Lipitor, Viagra isn’t such a stretch after that.
Beyond possible Rx-to-OTC switch scenarios, the other impact to this deal is in marketing synergy. In 2007, Pfizer and Wyeth together spent more than $2.3 billion on marketing, according to Advertising Age. While the new ad budget likely will be less than that, they’ll still be able to generate more traction with the media they do buy, given the greater buying power of the combined companies.