To its credit, when Albertsons filed its registration statement with the SEC seeking to launch its latest attempt to take the company public, it didn’t specify estimated stock value, share quantity or time frame for the potential IPO offering.
That’s a good thing because the public markets were already volatile before the March 6 filing notice. In the ensuing 10 days, the real and imagined threats from coronavirus pandemic make it likely that we’re months away from Albertsons even beginning the process toward completing a public offering.
That’s unfortunate because this time the Boise, ID-based retailer has its strongest story to tell in years. Key metrics – earnings, comp sales, online business growth, gross margin improvements and debt reduction – have been on the upswing and even though questions will always linger about whether a company with more than $8 billion in debt should even consider going public, Albertsons’ improving numbers, overall industry leverage (strong banners and a deeply vertically integrated company) make it a solid candidate to test the waters again.
And by “again” I mean for the third time. Ten months after it acquired Safeway in January 2015, Albertsons attempted to take its nearly $60 billion enterprise public. The road show was completed, and company executives’ spirits were high, anticipating a mid-October announcement. Then boom, like that (to quote the great Mark Knopfler), Walmart announced at its investors’ day that it expected gloomy future sales and earnings. At that moment, that IPO effort was dead in the water.
In 2018, the investment group that controlled Albertsons, including lead player PE firm Cerberus Capital Management, sought a different path that would serve as both an exit strategy and a public presence. They decided to attempt to marry into an existing publicly-traded firm – Rite Aid Corp. On paper, the deal made a lot of sense with two powerful but struggling channels seeking greater combined firepower. However, Rite Aid shareholders rejected what they thought was an underwhelming financial offer, and the potential “merger” was pulled even before holders could vote on it.
This time, the scenario was better. Up until about six weeks ago, the public markets were booming and bullish. Albertsons’ performance and perception, as noted earlier, was the strongest it’s been since Cerberus et al first invested in the “new” Albertsons in 2006 as the third spoke of what industry observers still call the “Supervalu deal.”
The reality is that months of planning are jeopardized or delayed. But there’s hope – the improvements that Albertsons has made over the past two years under Bob Miller, Jim Donald and current CEO Vivek Sankaran are real and paying dividends.
Once the coronavirus threat erodes and food retailers can hopefully regain their previous mojos, there should be opportunity for Wall Street to revisit Albertsons IPO attempt. And if that happens that will be a win, because in most cases I’d rather have my future destiny controlled by my shareholders than a group of hedge funds or faceless investment firms.
Baltimore-Washington Labor Deals Show Creative PathToward Resolving Looming Pension Plans Insolvencies
The relationship between retail food management and labor is usually a tenuous one at best. And during contract negotiations, the trust factor between the two sides becomes even shakier, often making the bargaining process resemble a caged UFC match.
The recently concluded successful negotiations between the UFCW and Giant and Safeway proved to be a battle royale, maybe at an even higher level than expected, but the results yielded the best contract that the 26,000 retail clerks and meatcutters who work for both chains have ever received.
But this was far from a one-sided affair. For Giant and Safeway, they achieved what many considered to be their most important long-term objective: finding a solution to the hugely unfunded liability that could threaten the retirement benefits of their current and former associates.
So from a cost outlay perspective, you might think that UFCW Local 27 and UFCW Local 400 put a significant dent in the financial reserves of parent firms Ahold Delhaize and Albertsons. And you’d be correct.
But for both big merchants, there’s more than a financial sticker that comes with labor peace. In fact, despite the acrimony and finger-pointing that comes with heavyweight bargaining, Giant and Safeway’s financial contributions to these new contracts indicated a sensitivity and moral compass rarely seen in today’s management/labor relations.
The message was clear: Giant and Safeway really do care about their associates, both the current ones (as indicated by the generosity of the new four-year contract structure) and their retirees.
Let’s also be candid: in no other markets where retailers and organized labor face huge unfunded liabilities with the multi-employer pension (MEP) plans has real progress been made to resolve the financial instability of their plans. In fact, the Central States plan which involves many unions and retailers in the Midwest is underwater by more than $40 billion! Tick, tick, tick…
That number alone, if it became insolvent, would bankrupt the Pension Benefit Guaranty Corporation (PBGC), the government agency that oversees MEP plans and acts to protect such plans if they implode, which would leave plan members with significantly reduced benefits.
These are complex issues, but two facts were almost instantly distilled even before negotiations began six months ago. The current FELRA plan was unfixable and a new path needed to be created to protect current employees going forward.
And this is where all parties need to be praised for their focus and dedication – everyone was willing to abandon the “kick the can down the road again” mindset which had prevailed for many years because there was not going to be one-stop solution.
That determination led to collective bold new thinking – “Why not ultimately let the FELRA plan dry up by not feeding it any longer and also develop a new fund that would take care of our current associates?” Brilliant.
By no longer funding the FELRA plan, insolvency would likely lead to the PBGC protecting the Giant and Safeway associates who belong to the fund (at a 70 percent level) and have the two chains cover the balance so those associates are protected.
Moreover, “Let’s collectively create a new plan (Variable Asset Fund – VAF) that will cover current associates’ future service benefits at a 5.5 percent annual return rate” (and ultimately retired employees once the FELRA plans become insolvent). With the VAF, Giant and Safeway together will contribute more than $10 million as starter “stabilization” funding.
Despite the fierce behind-the-scene battles that upset everyone during the months-long bargaining process, it came as no surprise that as the terms of the deal were finally disclosed, ratification was overwhelming.
All parties deserve great credit for pulling this off. And for me, who’s been writing about management/labor issues since 1973, given the current challenging retail environment which affects everyone in the business, this contract is ground-breaking stuff.
Coronavirus Creates Fear, Disruption On Many Levels
The coronavirus outbreak is becoming scarier and scarier for all of us, with more than 125,000 worldwide cases confirmed (and more than 1,400 the cases in the U.S. and growing) that, at presstime, have led to more than 4,800 deaths.
The fears of an oncoming pandemic and the ability of the virus to spread quickly has created unique challenges for many retailers and suppliers in our business. When you read stories like the one about 48 pallets of water being bought in a six-hour period at a Costco in Brooklyn, the panic mentality is real. Having talked to about a dozen retailers in the Mid-Atlantic and Northeast over the past three weeks all said sales were strong, primarily because customers are stockpiling many products – water, rice, pasta, canned goods, paper products and healthcare products, particularly hand sanitizers and face masks which are nearly impossible to find. “We’ve been on the phone non-stop with many of our key suppliers to find out about their inventory levels. And the news is not good. While our customers are frustrated with the increasing amount of out-of-stocks, manufacturers in most cases can’t increase their plant capacity that quickly. Even though we understand it, we’re not happy either,” said one chain retail executive whose company operates more than 100 stores in the region. “I think people are frightened by the uncertainty. Why is it spreading so quickly and seemingly so randomly? If I become infected, how sick will I get and how long will I be quarantined? I know people are working hard to provide answers and possible solutions, but the ‘unknown’ factor has created a lot of anxiety and fear with many of our customers. And it promises to get worse before it gets better.”
On a more visceral level, more than a dozen industry trade shows have been canceled or postponed and several retailers have announced that they have temporarily suspended face-to-face meetings between their merchandising teams and their vendors. In-store sampling, too, has largely been curtailed.
Sadly, this is a crisis where many of us feel uniquely powerless. As disruptive as this is on many levels, we should all strictly listen to what the scientists and medical professionals are advising. Be vigilant – this is a situation where there are no gray areas.
‘Round The Trade
I continue to be baffled by the mixed messages I hear from UNFI CEO Steve Spinner about the status of his underperforming organization. To wit: after announcing Q2 financials which saw a net sales decline and another quarter of negative profits, “Senor Spinmeister” remains bullish about the company’s prospects.
“UNFI continues to evolve as the industry leader providing retailers with today’s most sought-after products. “Despite considerable industry headwinds, I’m encouraged by our underlying performance and the momentum that is building within our business. Prior to charges associated with the three customer bankruptcies that impacted the quarter, we grew adjusted EBITDA by low double digits, and we remain optimistic as we move into the second half of our fiscal year and confident in UNFI’s long-term growth prospects,” said the Providence, RI-based chief executive in a statement. Later at the analysts’ follow-up conference call, he added: “With more than a year since our transformative acquisition, and despite industry headwinds for the last 12 months, I’m extremely proud of our integration efforts. We’ve now moved beyond integration and toward execution. Our strategic pillars have taken hold and we are seeing the results.” It’s true, that the company’s net loss was reduced from $341.7 million to $30.7 million this quarter, but that lower number included a $370.9 million pre-tax goodwill impairment charge as well as $17.4 million in additional restructuring and related expenses. And it’s also true that UNFI reduced its debt by $149 million during Q2, but the company’s bloated debt still stands at more than $2.5 billion, a number that can’t easily be reduced with its continued poor earnings. What’s not totally factored into this quarter’s earnings is the “triple bogey” that UNFI faced over the past six weeks. That’s the bankruptcy filings of three of its customers – Fairway, Lucky’s and Earth Fare who owe UNFI a combined $14 million. Those sales hits (and probably write-downs) will likely be reflected in the company’s Q3 earnings. And then there’s UNFI share price which took another hit 24 hours after the earnings release (shares were trading at a near record low of $5.32 on March 12). While Spinner and his acolytes have consistently claimed they have no control over UNFI’s share price, that’s only technically true. When the measurable metrics are as bad as they’ve been for more than a year, Wall Street will absolutely punish you. And when you add in the intangibles – a culture as dysfunctional as UNFI’s (especially from many legacy Supervalu associates), a negative perception from many of the wholesaler’s independent retailer customers (that I talk to) and lack of confidence from the supplier community, the Spinmeister’s “encouraging” words seem hollow, especially when you consider that a company that’s accruing about $23 million in annual revenue has a market value of less than $300 million. That’s just plain pitiful.
On the Walmart watch, the Behemoth continues its feverish pace to try to close the distance between it and Amazon. Multiple published reports indicate that Walmart will begin to test its own version of a membership program designed to compete with Godzilla’s “Prime” plan, which recently surpassed 150 million members. Walmart+ reportedly will roll out in a few markets and will offer some features that Amazon’s Prime does not (likely placing greater emphasis on its brick and mortar superiority). And to beef up its growing digital business, the Bentonville, AR-based merchant has named Jamie Iannone as its new COO for U.S. e-commerce. He was most recently CEO of the company’s samsclub.com business and will report to both Marc Lore, Walmart’s CEO of U.S. e-commerce, and John Furner, chief executive of Walmart U.S. And who else can say it expects to save $60 million annually in plastic shopping bags other than the world’s largest retailer? CFO Brett Biggs said that by changing the company’s buying process and better utilizing its scale, it can expect that level of savings. Biggs also noted that Walmart is saving 15 percent on the cost of vests worn by its associates. The new vests are made with recyclable materials which are reportedly more comfortable and sustainable…2,000 miles away, in Seattle, rival Amazon opened its first full-sized, cashierless “Go” store. While about a third of the size as the company’s projected supermarket, the first of which scheduled to open this summer Woodland Hills, CA, the new 10,400 square foot Seattle store offers an expanded line of produce, center store grocery items and beer and wine. And, much like what we are expecting to see in the new Amazon supermarket format, there are fewer natural and organic products than typically seen at the company’s Whole Foods subsidiary…after suffering through a challenging holiday season, Target is bullish about its near-term prospects. At a recent analyst conference, talented CEO Brian Cornell said that his company will spend $7 billion over the next three years to refurbish what he called “many tired stores.” Additional investments would be made towards e-commerce as well as to support employee wages and retail pricing initiatives. Cornell noted that as a vital part of its omni-channel strategy, maximizing delivery and pick-up options from the stores would remain priorities. The company also recognized the performance of its smaller store formats which have sprouted up in about a dozen U.S. cities over the past few years. Target said those stores produce more sales per square foot than its larger conventional stores. Revenue for the approximately 100 small format units, whose footprints range from 12,000 square feet to about 40,000 square feet, is about $1 billion annually.
Sveral sources have told us that there’s some big news likely coming shortly from Save-A-Lot, the beleaguered discount grocer owned by Canadian PE firm Onex and led by former Lidl execs Kenneth (“Stumble”) McGrath and Brendan (“Bumble”) Procter. After recently receiving some new financing, we’re hearing that S-A-L is considering selling most of its more than 350 corporately-owned stores, which would allow the company to better focus on its roles as a distributor and marketing arm for the approximately 700 licensed stores whose owners undoubtedly would be given first dibs for some of those locations. We also hear that Grocery Outlet, ripe with cash after last year’s successful IPO and looking to expand its Mid-Atlantic presence, is interested in some S-A-L locations and company personnel. We can also confirm the Hilco Real Estate and financial advisors The Cypress Group and P.J. Solomon have been recruited to help. Don’t be surprised if a Chapter 11 filing accompanies these potential moves.…a tip of the hat to Greg Ferrara, CEO of the National Grocers Association, which recently held its annual trade show in San Diego. Greg replaced Peter Larkin as commander of the NGA ship this year and his first show at the helm was a strong one. Retailers told us the seminars were insightful and that the larger sessions were also interesting and relevant. I can attest to the keynote speech given by Doris Kearns Goodwin, which was great. The diminutive historian and ardent Red Sox fan delivered an homage to her other favorite subjects – Abraham Lincoln, Teddy Roosevelt, Franklin Roosevelt and Lyndon Johnson. “She made you feel as though those presidents were in her living room having a conversation,” said one of the attendees…The Coastal Companies in Savage, MD, one of the largest produce distributors in the Mid-Atlantic region, announced late last month that it acquired another large produce wholesaler, Lancaster Foods, from Guest Services, Inc., a hospitality management company based in Fairfax, VA. Lancaster Foods joins Coastal Sunbelt Produce, East Coast Fresh and Hearn Kirkwood as subsidiaries of The Coastal Companies. The acquisition will enhance The Coastal Companies’ retail presence in the region and expands Lancaster’s product offering to include grab-and-go, ready-to-eat and prepared foods. “We are delighted to welcome Lancaster Foods to our family of companies,” said John Corso, CEO of The Coastal Companies. “Lancaster Foods shares our values of quality and service. This transaction pairs Lancaster’s leading position in retail with our leading position in foodservice to significantly expand The Coastal Companies’ market reach, sourcing and value-added capabilities.” The Coastal Companies will continue to operate Lancaster Foods under its current brand name and from its existing facility in Jessup, MD. John Gates, president of Lancaster Foods, and his team will remain with the company and continue to lead the organization. In conjunction with this transaction, Gates joins The Coastal Companies board of directors and becomes a member of The Coastal Companies Executive Leadership Team. “Lancaster and Coastal have emerged as leaders in their markets. We have shared values around people and relationships. We are excited to be joining The Coastal Companies.” said Gates. “Together, our network of vendors and our portfolio of products and services will enable us to provide even greater value to our customers.” With the addition of Lancaster, The Coastal Companies expands to four facilities, more than 650,000-square feet of cold storage and processing, with a market reach that stretches from Maine to Florida. Over the coming year, overlapping retail and wholesale customer relationships will be harmonized while foodservice relationships will remain unchanged. “The company has grown because we take care of our customers, we take care of our people, and we invest in our business,” said Corso. “Lancaster Foods is a great strategic and cultural fit with The Coastal Companies. We look forward to partnering with John Gates and his team.”
Local Notes
Village Super Market, Inc., the second largest Wakefern member 30 ShopRite stores, saw its Q4 earnings plummet 53 percent for the period ended January 25, 2020. The Springfield, NJ-based retailer attributed much of the profit decline to increased price investments (ShopRite’s chainwide commitment to everyday low prices on items customers purchase most frequently – ShopRite’s Right Price Promise – which was introduced in October 2019). Net income for the 13-week period was $2.01 million compared to $7.57 million in the 13 weeks ended January 26, 2019. Sales for the period were $437.4 million, an increase of 2.2 percent compared to the 13 weeks ended January 26, 2019. Sales increased due to the opening of the Stroudsburg, PA replacement store on November 1, 2019, the acquisition of Gourmet Garage on June 24, 2019 and a same store sales increase of 0.1 percent. Same store sales increased due to continued sales growth of the Bronx, New York City store opened on June 28, 2018, recently remodeled or replaced stores and continued growth of ShopRite from Home including expansion to five additional stores. The family-owned merchant, which has been owned by the Sumas family for more than 75 years, said that these increases were partially offset by the impact of one competitor store opening, decreased promotional spending in Maryland and the early release of Supplemental Nutrition Assistance Program (SNAP) benefits in January 2019. Also factoring into Village’s decreased earnings were diminishing pharmacy margins as a result of continued downward pressure on prescription reimbursement rates from third party providers. The company, which enjoys “stalking horse” status in its effort to acquire five Manhattan Fairway Markets and the bankrupt retailer’s perishables warehouse, recently saw its $70 million bid challenged by competitor Bogopa (Food Bazaar). The winning bid for those stores and the DC will be announced later this month.
Sprouts Farmers Market, which opened its newest Mid-Atlantic store in Wilmington, DE on March 11, posted better than expected Q4 sales and earnings, delivering an 8 percent overall revenue gain and a 1.5 percent comp store increase. Fourth quarter profit was $31.6 million beating Wall Street’s expectation. One key component in the strong results was Sprouts stellar 34.4 margin rate. “During the fourth quarter, I was encouraged by the Sprouts team’s dedication to driving same store sales growth, while we simultaneously delivered positive margins,” said CEO Jack Sinclair, the former Walmart executive who joined the perishables-driven Phoenix-based merchant last June. “We remain engaged in developing a long-term strategy and are optimistic about the future of Sprouts rooted in a brand that is good for you, good for your family and good for the planet.” The retailer also added Doug Rauch, former Trader Joe’s president, to its board. That’s a nice catch for Sprout’s, adding one of the industry’s brightest and creative minds to its family. Rauch spent 31 years with TJ’s, including 14 years as president.
Weis Markets earlier this month reported sales and earnings increases for both its recently completed fourth quarter and 2020 fiscal year. During the 13-week period ended December 28, 2019, the Weis’ overall sales increased 1.1 percent to $902.4 million compared to the same period in 2018, while Q4 comparable store sales increased 1.4 percent. Income from operations in the fourth quarter totaled $23.0 million compared to $15.5 million in the same period in 2018. The Sunbury-PA-based regional chain also saw fourth quarter net income increase 42.6 percent to $18.9 million compared to $13.2 million in 2018, while earnings per share totaled $0.70 compared to $0.49 per share for the same period in 2018.
Weis attributed its increases in fourth quarter 2019 sales and comparable store sales to targeted holiday promotions through its loyalty marketing program and continuing improvements in store level efficiencies and price optimization. For the full 52-week fiscal year, Weis’ overall sales rose 1 percent while comp revenue grew by 1.5 percent. Income from operations increased $2.0 million, or 2.4 percent to $84.6 million over the same period in 2018. The publicly-traded but closely-held retailer posted a net income increase of 8.4 percent to $68 million compared to $62.7 million in 2018 while earnings per share for the same period increased $0.20 to $2.53 per share. Weis said that sales over the past 12 months continued to benefit from investments in its “Low, Low Price (LLP)” program which offers price reductions on 7,000 private-brand items. Weis also said that volume also benefited from targeted loyalty marketing programs, varied promotions and advertising in key markets. “We made significant forward progress in 2019 by driving sales with targeted merchandising and marketing programs, significant price investments and improved in-store execution, which sustains our growth program,” said Weis Markets chairman and CEO Jonathan Weis. “The result was a 1.5 percent increase in annual comparable store sales in 2019. During the year, we also expanded online ordering with in-store pickup and home delivery to 184 stores which resulted in more than 250,000 orders and a 115.4 percent increase in online sales.”
Interesting story in the February 21 edition of The New York Times about the continuing struggles of grocery delivery merchant Fresh Direct. The company, which began delivery service to customers in Manhattan and Brooklyn in 1999, is rapidly losing online grocery share in its core market (down to 46 percent from 66 percent three years ago, according to research firm Second Measure). The story also notes that part of that market share decline can be attributed to other grocery delivery services – primarily Amazon, but also Peapod and supermarkets who use Instacart – which have cut into FreshDirect’s once dominant presence. The heavily leveraged firm also suffered when its 400,000 square foot automated distribution center in the Bronx which it began utilizing in 2018, initially performed poorly, creating out-of-stocks and inaccurate orders. While the e-retailer has expanded its operations as far south as Washington, DC, sales growth has in no way resembled the early years of the company. The e-merchant is now headed by co-founder David McInerney, who replaced another co-founder, CEO Jason Ackerman when he quit in 2018. In the Times interview, McInerney seemingly put one prevailing rumor to rest – the company, despite much industry speculation, is not currently for sale (although lead investor JP Morgan Chase did not confirm that). As for future objectives, McInerney stated: “Our goal is really to control the Northeast corridor. If I were to look into the future, there could be a bifurcation of shopping, where people are buying packaged goods in one place and fresh food in another.” Is McInerney overly optimistic or delusional? Time will tell…
Coming off a strong fiscal year and a very solid Q4, Ahold Delhaize recently released its new health and sustainability growth plan that will place an emphasis on increasing product transparency in meat and produce, reducing food and plastic waste and reformulating it’s “own brand” products to improve health. “Food-related diseases and the impact of climate change are affecting billions of people, including those in our communities and our business. That is why we need to accelerate in the areas where we can create the most value. As an international food retailer, we are in a great position to help attack these global issues together, with our customers and with our partners in the industry and across the supply chain, to create a healthier and more resilient food system. I am convinced that this will make our business stronger and more robust for the future,” said company president and CEO Frans Muller. This year marks the final one in company’s previous sustainability plan, which was announced in 2017 at about the time that Ahold and Delhaize merged. The international merchant prioritized four specific areas to target, starting with healthier choices. After baselining all own-brand products against science-based nutritional navigation systems, the local brands of Ahold Delhaize aim to further increase sales of healthy own-brand products to more than half of total own-brand food sales, with a target of 51 percent by 2022. To achieve this, the brands will continue their commitment to reformulate products (e.g., less sugar, salt, fats) and to make it easier for customers to meet their own, personal health needs. By 2025, all Ahold Delhaize brands will provide science-based nutritional navigation systems for customers, such as Nutri-Score and Guiding Stars, in stores and online. Product transparency: Ahold Delhaize and its local brands can help customers make choices that fit their needs, their tastes, and their values. To facilitate these choices, the company will provide even more information about where own-brand products are sourced, which production methods are used and under which conditions they are produced. Building on the company’s nearly 100 percent visibility and sustainability in its own-brand seafood supply chains, it will move quickly to apply lessons learned to its fresh fruit, vegetable, and meat supply chains. Secondly, it will be eliminating waste and food waste. The brands of Ahold Delhaize will continue reducing food waste from operations, cutting it in half by 2030, in line with the U.N.’s Sustainable Development Goal. This work requires balancing the reduction of food waste with our goal to increase sales of fresh and healthy products. To achieve this target, the brands will use more effective replenishment systems, leverage innovative methods, such as dynamic pricing based on sell-by date, and further expand partnerships to repurpose unsold but safe food to relieve food insecurity. Additionally, as a founding member of the 10x20x30 food waste initiative, Ahold Delhaize is also partnering with 20 key suppliers to reduce food waste throughout supply chains. Also, the Ahold Delhaize brands are working toward zero plastic waste from own-brand packaging by 2025, through packaging reduction and moving to fully recyclable, reusable, or compostable plastics. Furthermore, 25 percent of own-brand plastic packaging will be from recycled materials by 2025. Ahold Delhaize has also committed to setting long-term, science-based targets as of February 2021 to reduce its impact on climate change. On human rights, the company is already conducting due diligence, following the U.N. Guiding Principles on Business and Human Rights, to ensure that their brands, businesses, and supply chains are protecting the rights of customers, associates and community members. The company’s brands are increasing standards for the sustainability of products they sell, while maintaining best-in-class standards for food safety and quality. Finally, as part of its healthy and sustainable ambition, the company continues to focus on improving workplace safety. Ahold Delhaize said it will continue to report on the progress of its healthy and sustainable ambition in its annual report and on aholddelhaize.com.
In related Ahold Delhaize news in the U.S., the company Giant/Martin’s brand has unveiled a new corporate name and logo. The Carlisle, PA-based unit will now be called The Giant Company, and its new logo features oversized red letters, including a highlighting of the “a.” “For nearly a century, we’ve been a trusted part of the communities we serve, helping families come together to share a meal and create special memories,” said president Nick Bertram. The new look will be utilized for all the company’s banners – Martin’s, Giant Heirloom Market, Giant Direct and Martin’s Direct have been refreshed. The new logo will become fully integrated in all Giant branding over the next 12 months
Fresh Grocer has closed its University City location (40th and Walnut Streets) after losing a lengthy legal battle with the site’s landlord – the University of Pennsylvania. The fight began nearly four years ago when Penn said that Fresh Grocer (owned by Pat Burns and a member of Wakefern) did not renew its lease in a timely fashion and terminated the lease which was scheduled to expire in March 2017. Penn asked Fresh Grocer to leave by the time the lease was set to expire, in March 2017, but Fresh Grocer then sued the Ivy league school, citing wrongful termination. The case has dragged on since before a ruling was made last month. That clears the way for Acme to take over the site, which Penn said would be the case in 2016. University of Pennsylvania spokeswoman Jennifer Rizzi confirmed that Acme would still be the site’s new tenant, stating, “Acme is committed to developing and operating a first-class urban grocery store. We look forward to the opening of the new supermarket later this year.”
From the obit desk we have several deaths to report. I’m very sad about the passing of Jay Gordon, one of the mainstays of the Philadelphia food scene for the past 55 years. A truly larger than life figure, Jay was the consummate peddler, beginning in his father’s brokerage business, Sam Gordon Associates in 1964, and continuing up until his death with his partner Harry Arena at Sales Management Partners (SMP). Jay, 73, was loud and funny with a big heart and kind soul who had a way of making everyone around him feel better about themselves.
Joe Coulombe, the man who created Trader Joe’s, has passed away at the age of 89. Coulombe opened his first store in Pasadena, CA in 1967 as an offset to the more conventional supermarket chains which permeated much of southern California. The store was stocked with such products as granola, trail mix, olive oil and dried fruit – items not typically seen in a food store at the time. Coulombe expanded his operation to other areas in SoCal markets before selling the then 18-store company to the Theo Albrecht family (Aldi Nord) in 1979. Today there are about 500 Trader Joe’s stores in more than 40 states. Coulombe remained CEO of the funky nautically-themed grocer company until 1988 and stayed with TJ’s as an unofficial consultant the until his retirement in 2013…one of the true icons of American business, Jack Welch, passed away earlier this month at the age of 84. The former chairman and CEO of General Electric, Welch not only reshaped his company, he was arguably the most influential businessman during a 20-year period that began in 1981. Nicknamed “Neutron Jack,” Welch oversaw more than 300 separate businesses that GE operated or acquired. During his tenure, the company laid off more than 100,000 employees, but Welch defended his sometimes “slash and burn” mindset by noting, “Billions of dollars have been made or saved through sales and layoffs,” as GE reinvested the savings in new ventures. While he was at the helm, GE’s market value rose 40-fold to $500 million. By the late 1990s, GE ranked second to only Microsoft as the world’s most valuable company
James Lipton, a man who could draw out the most intimate details from many show business celebrities, has also passed on. Lipton, who hosted the TV show “Inside The Actor’s Studio” for 23 years, provided a fascinating look at the nuances and vulnerabilities of some of the world’s most famous actors including Paul Newman, Jack Lemmon, Sally Field and Dennis Hopper. More than 275 stars were interviewed during the show’s run from 1994 through 2017. A failed actor himself, Lipton proved to be a better writer and an even a better interviewer. And Lipton’s character gained even more popularity when he was regularly lampooned by Will Ferrell on “Saturday Night Live.” He was also featured as a murder victim on “The Simpsons.” Lipton was 93 when he passed…Sy Sperling is dead (although his hair weave apparently survives). The founder of The Hair Club For Men, who dominated TV infomercials in the 1980s and 1990s, has died at the age of 78. A former home improvement salesman, Sperling was unhappy with his appearance, and with the help of a former girlfriend, he bought a defunct salon in Manhattan and developed a hair replacement system that used a fine nylon mesh, adhesives and hair colored to match the customer’s to develop his product. He cut his first commercial in 1982 and within a few years those ads were running up to 400 times per day nationally and brought Sperling instant celebrity and, ultimately, a very successful business, which he sold in 2000 to a private equity firm for $45 million. And exactly what was the hook that made Mr. Sperling so famous? “I am not only the hair club president, but I’m also a client.”