A&P files for Ch. 11 bankruptcy
MONTVALE, N.J. — Battling hefty debt and intense competition, grocer A&P filed for bankruptcy on Sunday and has secured $800 million in debtor-in-possession financing to keep the 395-store chain open and operational during the proceedings.
"We have taken this difficult but necessary step to enable A&P to fully implement our comprehensive financial and operational restructuring. While we have made substantial progress on the operational and merchandising aspects of our turnaround plan, we concluded that we could not complete our turnaround without availing ourselves of Chapter 11. It will allow us to restructure our debt, reduce our structural costs and address our legacy issues," A&P president and CEO Sam Martin stated.
The grocer listed total debts of more than $3.2 billion and assets of roughly $2.5 billion in a petition filed in bankruptcy court in White Plains, N.Y., according to a Wall Street Journal report.
A person familiar with the situation told the WSJ that A&P’s inability to negotiate concessions from its primary supplier, C&S Wholesale Grocers, contributed to the company’s decision to file for bankruptcy.
Furthermore, the retailer had about $13 million in interest payments due to unsecured creditors, the WSJ reported, and wanted to keep those funds rather than pay them to those that would be further down in the payment scale during bankruptcy proceedings.
According to A&P, as it implements its financial and operational restructuring, it intends to continue and accelerate most of the basic elements of the turnaround plan announced in October, including:
A completely new management team that is in place;
The reduction of structural and operating costs;
The improvement of the A&P value proposition for customers; and
The enhancement of the customer experience in stores.
The company also announced that Frederic F. "Jake" Brace, who was named chief administrative officer in August, will lead the company’s restructuring effort. Brace will take the additional title of chief restructuring officer. The retailer has entered into an $800 million DIP facility with JPMorgan Chase. A hearing to approve a portion of the facility has been scheduled for Dec. 13.
Upon approval, this DIP facility will be available to fund A&P’s operations, pay its vendors and for other corporate purposes. In addition, this financing will provide the capital necessary to continue the company’s efforts to improve and renovate select stores and provide enhanced product offerings to its customers, the company stated.
Founded in 1859, A&P is one of the nation’s first supermarket chains. Aside from its namesake A&P chain, the retailer also owns Waldbaum’s, Pathmark, Best Cellars, The Food Emporium, Super Fresh and Food Basics.
Colgate-Palmolive CFO retires
NEW YORK — Stephen Patrick late Friday announced his retirement as CFO of Colgate-Palmolive, effective Jan. 1.
Patrick, who has been working with the company since 1982 and has been CFO for 14 years, will be succeeded by 33-year Colgate veteran Dennis Hickey, VP and corporate controller. Patrick will assume the role of vice chairman until March 2011.
"Colgate has greatly benefited from Steve’s outstanding financial leadership," Colgate chairman and CEO Ian Cook said. "His strategic insights, keen financial understanding and vast Colgate knowledge have helped us advance our key financial performance measures to world class levels. We look forward to Dennis’ financial leadership as CFO, utilizing his 33 years of Colgate experience and his proven capabilities as a financial leader."
Brand awareness resonates among young people
WHAT IT MEANS AND WHY IT’S IMPORTANT — Take a quick glance at the top 10 list, and not knowing that these are the brands resonating with today’s children/young adults, you might mistake this for a list of the top 10 advertising campaigns. Or the top 10 social media campaigns. Or the top 10 Super Bowl commercials. Or the top 10 things you’ll most likely find in your teen’s room.
(THE NEWS: Harris Interactive: M&M first in brand equity among youth. For the full story, click here)
The bottom line, tomorrow’s shoppers already are becoming familiar with today’s brands in ways that yesterday’s marketers could hardly ever have dreamed about — interactively online on individual branded Web pages or through such sites as YouTube (type “Doritos Super Bowl commercial” into the search engine and you’ll get some 4,500 hits. Google “Doritos Super Bowl commercial” and you’ll get 7,000).
On Facebook, for example, half of the brands listed in the top 10 have well more than 1 million fans on at least one of their fan pages (and many of them have multiple fan pages, some perhaps unofficial). There are some 1.4 million Facebook aficionados who have taken the time to “like” Doritos. As many as 2.2 million are fans of Google, 3.3 million of Target, 3.5 million of Subway and a whopping 6.6 million of Disney Pixar.
If you were to use the number of Facebook fans who “liked” an iconic brand to gauge any kind of “hipness” factor, then Walmart isn’t too far behind with 2.2 million fans on one page. And Walgreens is fast approaching that 1 million watermark with more than 700,000 fans to date.
And judging from the amount of sweets on these top 10 lists, there won’t be too many tomorrows before today’s young adults begin “friending” their local pharmacists and “liking” their local pharmacies.