Over and Out?
Dec 1, 2006 12:00 PM, Elaine Misonzhnik
In an effort to improve its financial performance after an accounting scandal in 2003 hurt its bottom line, Dutch supermarket operator Royal Ahold N.V. plans to sell its 72 Tops Markets stores in New York and Pennsylvania. Net sales for Ahold's Giant-Carlisle/Tops division brought in $6.4 billion in 2005, down 4.2 percent from 2004's figures.
Ahold already divested 18 Tops stores in Ohio — in October, the Pittsburgh, Penn. — based Giant Eagle, Inc. agreed to buy the stores for an undisclosed amount. Giant Eagle operates 216 supermarkets in Pennsylvania, Ohio, West Virginia and Maryland.
This time, the stores will likely go to the Golub Corp., a Schenectady, N.Y. — based company that operates 115 Price Chopper Supermarkets in New York, Vermont, Connecticut, Pennsylvania and Massachusetts. Price Chopper officials say they are currently performing due diligence on the Tops properties.
“We are examining the situation,” says Neil Golub, president and CEO of Golub Corp. “When we do our homework and pull all of our resources together, we'll figure it out.”
Tops stores range from 5,482 square feet of space to 73,960 square feet. Price Chopper formats are larger, starting at 37,000 square feet and going up to 100,000 square feet.
This won't be the first transaction for Price Chopper and Ahold. Last year, Price Chopper purchased six Tops Markets in central New York from the Dutch operator.
Ahold bought Tops in 1991 from its U.S.-based founder Armand Castellani. Around the same time, the Price Chopper chain started rapidly expanding throughout the New England market.
Ahold plans to use proceeds from the sale of Tops, as well as from the disposition of U.S. Foodservice, its food distribution business, to return more than $2.566 billion to its shareholders and to pay approximately the same amount in debt.
The company also announced its intention to divest its retail operations in Poland and Slovakia and to sell a 49 percent stake in Jeronimo Martins, its Portugal-based food distribution and manufacturing business.
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