BREAKING NEWS: Eric Claus Leaves A&P; Company Posts Wider Q2 Loss
Eric Claus, president and CEO of the Great Atlantic & Pacific Tea Co. since 2005, is leaving the company effective immediately. No reason was given for Claus' departure, which comes in tandem with disappointing second-quarter fiscal performance by the Montvale, N.J.-based grocery chain.
A&P has initiated a search for a successor, and in the interim, executive chairman Christian Haub will resume the roles of president and CEO. Previously, Haub was A&P's CEO from 1998 until 2005, president from December 1993 to February 2004, and president again from November 2002 to November 2004.
"I would like to thank Eric Claus for his contributions to our company during his tenure at A&P and wish him well in his future endeavors," noted Haub. When contacted by Progressive Grocer, the company had no further comment on Claus' decision to leave, or what his subsequent plans were.
Before taking the helm of A&P, Claus was president and CEO of the company's now-defunct Canadian division from November 2002 to August 2005. Before joining A&P, he was CEO of Co-Op Atlantic from February 1997 to November 2002.
Under Claus' leadership, A&P developed its current Fresh, Discount, Gourmet and Price Impact store formats, acquired former rival New Jersey-based grocer Pathmark and wine retailer Best Cellars, beefed up the company's private label program, and assembled an impressive array of top-flight managerial talent, including SVP of merchandising and supply & logistics Rebecca Philbert, formerly of Safeway.
Simultaneous with Claus' departure, the Montvale, N.J.-based company reported its fiscal 2009 second-quarter and year-to-date results for the 12 and 28 weeks ended Sept. 12, 2009. Sales for the quarter were $2.1 billion vs. $2.2 billion last year, while comparable-store sales slid 3.8 percent. 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.
Sales for the 28 weeks year to date were $4.9 billion vs. $5.1 billion in 2008, and comps fell 3.6 percent. Year-to-date reported loss from continuing operations was $120.5 million compared with $1.5 million for 2008, including a $100.4 million increase in non-cash mark-to-market adjustments related to financial liabilities.
"The current challenging economy continues to impact our business," said Haub. "The macro headwinds including rising unemployment, intensifying price competition and now also deflation are creating an even more difficult short-term economic environment. Nonetheless, we have made progress in several of our formats and many of our initiatives.
"Our legacy business, which is mainly comprised of our Fresh, Discount and Gourmet stores experienced negative same stores sales in the quarter, but through tight expense control and stronger margins produced positive year over year segment income," he continued. "Our Price Impact or Pathmark business continues to struggle as we experienced negative same-store sales and negative year-over-year segment income. We have been making the difficult choices for the short term, such as improving our retail pricing, and will continue to work on lowering our expenses, enhancing our customer service and improve our overall brand image of this key format."
Haub observed that the recent infusion of $400 million, from West Coast supermarket investor Yucaipa and longtime majority shareholder Tengelmann "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." He also expressed optimism that the eventual recovery of the economy would enable A&P "to capitalize on our leadership position in the Northeast."
A&P has initiated a search for a successor, and in the interim, executive chairman Christian Haub will resume the roles of president and CEO. Previously, Haub was A&P's CEO from 1998 until 2005, president from December 1993 to February 2004, and president again from November 2002 to November 2004.
"I would like to thank Eric Claus for his contributions to our company during his tenure at A&P and wish him well in his future endeavors," noted Haub. When contacted by Progressive Grocer, the company had no further comment on Claus' decision to leave, or what his subsequent plans were.
Before taking the helm of A&P, Claus was president and CEO of the company's now-defunct Canadian division from November 2002 to August 2005. Before joining A&P, he was CEO of Co-Op Atlantic from February 1997 to November 2002.
Under Claus' leadership, A&P developed its current Fresh, Discount, Gourmet and Price Impact store formats, acquired former rival New Jersey-based grocer Pathmark and wine retailer Best Cellars, beefed up the company's private label program, and assembled an impressive array of top-flight managerial talent, including SVP of merchandising and supply & logistics Rebecca Philbert, formerly of Safeway.
Simultaneous with Claus' departure, the Montvale, N.J.-based company reported its fiscal 2009 second-quarter and year-to-date results for the 12 and 28 weeks ended Sept. 12, 2009. Sales for the quarter were $2.1 billion vs. $2.2 billion last year, while comparable-store sales slid 3.8 percent. 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.
Sales for the 28 weeks year to date were $4.9 billion vs. $5.1 billion in 2008, and comps fell 3.6 percent. Year-to-date reported loss from continuing operations was $120.5 million compared with $1.5 million for 2008, including a $100.4 million increase in non-cash mark-to-market adjustments related to financial liabilities.
"The current challenging economy continues to impact our business," said Haub. "The macro headwinds including rising unemployment, intensifying price competition and now also deflation are creating an even more difficult short-term economic environment. Nonetheless, we have made progress in several of our formats and many of our initiatives.
"Our legacy business, which is mainly comprised of our Fresh, Discount and Gourmet stores experienced negative same stores sales in the quarter, but through tight expense control and stronger margins produced positive year over year segment income," he continued. "Our Price Impact or Pathmark business continues to struggle as we experienced negative same-store sales and negative year-over-year segment income. We have been making the difficult choices for the short term, such as improving our retail pricing, and will continue to work on lowering our expenses, enhancing our customer service and improve our overall brand image of this key format."
Haub observed that the recent infusion of $400 million, from West Coast supermarket investor Yucaipa and longtime majority shareholder Tengelmann "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." He also expressed optimism that the eventual recovery of the economy would enable A&P "to capitalize on our leadership position in the Northeast."