A&P confirmed that it is putting its 16 New York City Food Emporium stores on the market. A 17th store, located in New Canaan, CT, would not be part of the deal.
The Montvale, NJ based supermarket operator announced the plan to its employees in early September, a company spokesperson said. In a statement, the company said, “We commenced a marketing process of The Food Emporium in early September. The Food Emporium represents a unique urban footprint that requires a specific go-to-market strategy. Therefore, we’ve made the decision to market these 16 Manhattan stores to a variety of prospective buyers. The sale will enable parent company A&P to support the company’s long-term strategic vision to be the number one food and drug store in every neighborhood it serves.”
The stores, its leases and the brand are for sale, according to the spokesperson. Duff & Phelps, a multi-service banking firm, has reportedly been retained by A&P to market the stores.
The decision represents the first major move by A&P since it emerged from bankruptcy in March. The company, founded in 1859, which operates 320 stores under the A&P, Pathmark, Super Fresh, Waldbaum’s, Food Emporium and Food Basics banners, has closed nearly 80 stores since filing for bankruptcy protection in December 2010.
It had long been speculated that the company would sell its Food Emporium division. Other grocery chains, including Trader Joe’s and Whole Foods Market, would seem likely candidates interested in Food Emporium’s locations.
Additionally, the smallest banner in the A&P fleet could attract interest from private equity organizations. Analysts believe the company will use the proceeds of the Food Emporium brand to invest in A&P’s other banners.
A&P originally acquired Food Emporium in 1986 from the Shopwell Group and speculation about selling the banner existed even before A&P filed for bankruptcy protection.
Venture capitalist Ron Burkle, chairman of The Yucaipa Cos., is chairman of A&P and Sam Martin is currently serving as chief executive.
Since it exited Chapter 11 in March, the Tea Company has made few moves to upgrade its store base or its merchandising programs.
Because it is now privately held, very little information has been released about the company, but several key vendors report that their sales at A&P have declined slightly since Burkle took the once-mighty retailer private.