Food Trade News

Thomas P. Infusino, former chairman and CEO of Wakefern Food Corp. and co-president of Nutley Shoprite, died on February 5 at 89.

Mr. Infusino was born in Hillside, NJ and resided in Nutley, NJ for 62. His career in the food industry spans more than 70 years and is distinguished by his championing of the consumer and the cooperative spirit and his ardent support of the independent supermarket retailer.

A member of the Wakefern Food Corp. cooperative since 1953, Infusino joined its board of directors in 1965. In 1971, he was elected to the office of president, a position which would later be renamed chairman and CEO. Infusino’s service to Wakefern was marked by his ability to lead the cooperative through some of its more notable struggles. Strength of character, integrity and uncompromising ethics all have been used to describe the man who led Wakefern for 34 years. His leadership and resolve have been instrumental in helping Wakefern/ShopRite to become the Northeast’s leading supermarket retailer and a respected corporate citizen.

In 2005, having served as chairman and CEO for more than three decades, he was named chairman emeritus of Wakefern Food Corp.

Recognized for his philanthropy, Infusino has been honored with many awards including the Prime Minister’s Medal in 1974, the highest civilian award given by the State of Israel – he felt deeply and strongly about Israel and its continued security and development. He also received the Lifeline Award, given by the Cooley’s Anemia Foundation. The Lautenberg Center for General and Tumor Immunology created the annual Thomas P. Infusino Prize Lecture in Cancer Causation and Epidemiology in recognition of his accomplishments.

Infusino’s contributions to the supermarket industry were acknowledged when he received the New Jersey Food Council’s Lifetime Achievement Award in 2001 and in 2002. Supermarket News named him to its list of 50 Visionaries Who Transformed Food Retailing.

Infusino was a founding member of the New Jersey Food Council, serving as its chairman from 1974 to 1976 and receiving the organization’s 1990 Industry Leadership award. He served as a member of the board of governors of the National Conference for Community and Justice. He was also the longest standing member of the board of directors for the New Jersey Food Council, and was a member of the Food Council Committee for Good Government.

He also served for many years on the board of directors of the Valley National Bank. Tom was an active member and officer of local Nutley organizations such as the Lion’s Club, the Family Service Bureau, and the Chamber of Commerce. He was also a member of the Board of Deacons at the St. Paul’s Congregational Church.

He received multiple awards from local organizations, such as the Jaycees and the PBA, where he received the Citizen of the Year Award. He was also inducted into the Nutley Hall of Fame.

As a young man Infusino worked at a produce stand in his hometown of Irvington, NJ, beginning his lifelong passion for the food industry. Sam Aidekman, his employer and one of the founding members of Wakefern, co-signed a loan in 1946 enabling Infusino and his brothers, Chuck and Joe, to open their own grocery store on Sanford Avenue in Newark, NJ. In 1953, Infusino and his partner, Vincent Lo Curcio Jr., joined Wakefern. Together they operated the Nutley Park ShopRite, a partnership that continues today with Lo Curcio’s son, Vincent Lo Curcio III.

Infusino was a veteran of World War II, having served in the Army on the battlefields of North Africa and Italy. Following his return from active duty, he married Estelle and settled in Nutley, where they raised four sons.

Most recently, Infusino was awarded an honorary degree, Doctor of Humane Letters, by Seton Hall University for his commitment to high professional standards and business ethics. In recognition of his more than 50 years of service to Wakefern, a chair has been endowed in his name at the New Jersey Medical School at UMDNJ, the largest health sciences institution in the nation.

Infusino is survived by his sons, Jeffrey Infusino and his wife Randi, David Infusino, and Michael Infusino and his wife Helen. He is also survived by his brothers, Chuck Infusino Sr. and Salvatore Infusino, and his grandchildren, Thomas P. Infusino III, Anthony, Michael Jr., Andrianna, Scott and Michelle Infusino. He was predeceased by his wife Estelle (nee Balsam) Infusino; his son Thomas P. Infusino Jr., and his brothers Angelo Infusino and Joseph Illard.

In lieu of flowers, donations may be made to St. Joseph’s Regional Medical Center Foundation, 703 Main St., Paterson, N.J. 07503, or the Nutley Volunteer Emergency and Rescue Squad, Box 172, Nutley, NJ 07110.

St. Joseph’s University’s Academy of Food Marketing (AFM), one of the nation’s premier academic institutions and a leading training ground for developing talent for the grocery industry, is evolving. Under the stewardship of Bob Higgins, a 1968 graduate of St. Joe’s who was named executive director in September 2009, the AFM has reconstituted its board of governors and established new direction and fundraising objectives.

In recent months, nine new board of governors members have been added, all with key industry roles from both the retail and supply sectors. Those new directors are: Dave Jones, Kellogg USA, who is VP for industry initiatives and is responsible for trade advertising for the large Battle Creek, MI manufacturer who brings more than 20 years of food marketing experience to the board, having started with Kellogg USA in 1986; Robert E. Hill Jr., president and CEO of Acosta Inc., a full-service sales and marketing agency providing outsourced headquarter sales, retail merchandising, marketing, and customer support services to consumer packaged goods president and CEO of Brown’s Super Stores, Inc., the large Delaware Valley independent retailer trading under the ShopRite banner. Brown was recently recognized by the National Grocers Association as the 2010 recipient of the Thomas K. Zaucha Entrepreneurial Excellence Award, a top national honor in the grocery industry; Jeff Martin, Ahold USA, who is executive VP- merchandising and marketing for the Dutch chain’s U.S. platform; Tom McAloon, Wal-Mart Stores, Inc. McAloon is the metro Philadelphia/greater New Jersey regional general manager for he world’s largest retailer; and J.M. Procacci, Procacci Brothers Sales Corporation, where he serves as chief operating officer for the large produce wholesaler/distributor headquartered in Philadelphia. Procacci also serves as the chief operating officer for Santa Sweets Inc., the largest grower of organic tomatoes in the United States.

And earlier this month, three additional board members were named: Meg Ham, president of Bottom Dollar, a unit of Delhaize America, where she oversees all aspects of

the retailer’s operations, including its financial performance, merchandising, pricing, customer service and marketing. Bottom Dollar debuted in the Delaware Valley late last  year; John Orobono, senior VP-supply chain management, for Aramark Global Food, Hospitality and Facility Services. He is based in Philadelphia and responsible for developing and executing the strategic vision of Aramark’s global sourcing activities, including procurement, distribution, value optimization and food safety; and Jeff Siegel, a 26 year veteran of Nestle where he currently serves as VP-customer interface group at the manufacturer’s Purina Pet Care Company.

Higgins has spent his entire business career in the grocery industry (Scott Paper, Irving Tissue). He joined St. Joe’s as executive director for the Center for Food Management

(executive education/research) after his retirement from Irving Tissue in 2005.

Now, as head of the AFM, much of his time is spent on recruitment, placement and expansion strategies for the academy, which supports the Erivan K. Haub School of Business (HSB) Department of Food Marketing at Saint Joseph’s.

In the past several months, the AFM has also revised its executive committee. Headed by John Machuzick, president of General Mills’ foodservice and bakery unit, other members include: Judy Spires (vice chairperson), president and CEO of Kings Super Markets; Mike Rothwell (treasurer), president of Pennington Quality Market; and Higgins, who serves as secretary. All but Spires (LaSalle) are St. Joe’s graduates. From that group four core committees were formed to lead all aspects of the AFM. The nominating committee, led by C&S Wholesale’s Mike Kelly, will review diversity and the expansion of the AFM board into other channels of distribution. Mike Rothwell will lead the finance and audit committee and Tony Ferolie will chair the fundraising and development committee. Among that committee’s priorities will be to develop new streams of fundraising for the university. Additionally, Neil Crowley, an adjunct professor at SJU and former executive at Pathmark, will oversee the educational insight committee, which will examine the skill sets the industry is seeking as students take their academic journey through St. Joe’s. All committee chairs are graduates of the Food Marketing Educational Foundation.

“One of our overall goals at the Academy is to develop a more integrated approach to serving the food industry,” said Higgins. “For example, we need to be developing talent for the foodservice industry as well as retail. And even within retail, there are new portals that have become important. Part of our job is that we remain current with industry trends and needs, both from a retailer/ wholesaler and a manufacturer perspective.”

In its 49 year history the report card has perennially been very good. The Academy of Food Marketing at St Joseph’s University is among the four largest academic institutions with food curriculums in the country (along with Cornell, Portland State and Western Michigan). Currently, there are approximately 425 students who are food marketing majors in the undergraduate business program and over the approximately 100 graduates each year, 99 percent gain employment within a year – 80 percent before they graduate.

The AFM also offers a unique five year co-op program, where students are employed by food related companies for three six month work periods. About 25 percent of AFM students now participate in the university’s co-op program.

Higgins also noted that the AFM faculty has expanded. Dr. John Stanton is now chairman of the food marketing department and new talent such as Mark Lange (formerly with Publix). George Latella (formerly of Tastykake) and Tim McMahon (formerly of ConAgra) are now part of the academic team.

“We have an ambitious platform,” Higgins noted. “We want to take this program from regional to national, not only with our student base, but by marketing ourselves to national retailers and CPG firms (the AFM currently draws undergraduate students from 27 states).”

It is an exciting time at the Academy of Food Marketing. Along with the many internal changes and aggressive initiatives on the table, Higgins confirmed that the AFM will be hosting two Citation dinners in the next 14 months – on October 1, Ahold USA will be honored at the Marriott in Philadelphia and in April 2012 the Academy will help celebrate Weis’ 100th anniversary with a dinner at the Hershey Lodge.

How much longer can the bleeding continue? That’s the question analysts and observers are wondering about the worsening state of Supervalu. The grim news continued last month as the Eden Prairie, MN retailers/wholesaler announced that it lost $202 million, or 95 cents per share, for the quarter ended December 4. That’s compared with a profit of $109 million, or 51 cents per share, in the same quarter last year. Supervalu recorded a huge $252 million in charges during the quarter, mainly to reflect its diminishing value and other intangible assets. The charges also covered store closing costs, employee severance and other items. Excluding the charges, the company earned 24 cents per share.

With the disappointing news, Wall Street and shareholders drove the stock to $7.34 per share that same day. Thirteen days later on January 25, the stock sank to a 25 year low, bottoming out at $7.06 per share. At presstime on February 4, SVU shares were selling at $7.31.

Overall sales decreased from $9.2 billion to $8.7 billion. At retail only, Supervalu’s third quarter net sales were $6.6 billion compared to $7.1 billion last year, a decrease of 7.7 percent, primarily reflecting the impact of identical store sales of negative 4.9 percent and previously announced market exits, the company stated. The identical store sales performance, Supervalu noted, resulted from a continued challenging economic environment and heightened competitive activity. Retail square footage decreased 4.1 percent from the third quarter of fiscal 2010. Excluding the impact of market exits and store closures, total retail square footage increased 1.0 percent compared to the third quarter of fiscal 2010.

The company also announced, in a follow-up conference call that both customer counts and transaction sizes continued to decline. On the conference call, Supervalu’s chief executive Craig Herkert also spoke of the importance of Supervalu veteran Janel Haugarth who has added responsibility of all corporate merchandising to her executive VP duties.

Just prior to the earnings call, Supervalu announced the February closings of 29 retail stores across the country, including 17 on the East Coast. Those include five Shoppers Food & Pharmacy units in the Baltimore-Washington market (Owings Mills, MD; Timonium, MD; Alexandria, VA (Penn Daw); Fredericksburg, VA; and Gainesville, VA);   six Acme Markets (Limerick, PA; Wayne, PA; Cinnaminson, NJ: Millville, NJ; Moorestown, NJ: and Fallston, MD), five Shaw’s Supermarkets in New England (New Bedford, MA; Revere, MA; Stoneham, MA; Johnston, RI; and Warwick, RI);; and one Farm Fresh unit in downtown Norfolk, VA.

Herkert said, “Our performance is still not close to my expectations and we continue to take action to change the trajectory of our businesses. Through our business transformation process, we will invest in price, leverage our buying power and enhance retail execution. These measures underscore our commitment to deliver everyday value to our customers as we execute on our vision of being America’s Neighborhood Grocer.”

Third quarter supply chain services net sales were $2.1 billion, the same as last year.

Retail food net sales in the third quarter of fiscal 2011 represented 75.8 percent of net sales compared to 77.3 percent last year. Supply chain services net sales in the third quarter of fiscal 2011 represented 24.2 percent of net sales compared to 22.7 percent last year.

Gross profit was $1.9 billion in the third quarter, or 21.5 percent of net sales, compared to $2.1 billion or 22.4 percent last year. The decrease in gross margin as a percent of net sales reflects the shift in business segment mix and increased promotional spending.

Selling and administrative expenses in the third quarter were $1.72 billion, or 19.9 percent of net sales, including $63 million in pre-tax costs related to store exit, severance and labor buyout costs. Excluding these items, selling and administrative expenses were $1.66 billion, or 19.2 percent of sales. In the third quarter of fiscal 2010, selling and administrative expenses were $1.8 billion, or 19.0 percent of net sales, including a $22 million pre-tax net gain from the Salt Lake City retail market exit and $4 million in pre-tax costs related to store closures. Excluding these items, selling and administrative costs were $1.8 billion, or 19.2 percent of net sales. The benefit of business segment mix shift was offset by reduced sales leverage on expenses.

Goodwill and asset impairment charges of $240 million pre-tax were recorded in the third quarter and reflected in the retail food segment operating earnings. As a result, third quarter retail food operating loss was $153 million. Excluding the goodwill and asset impairment charge, as well as $59 million in pre-tax costs related to store closure and exit, severance and labor buyout costs, retail food operating earnings in the third quarter were $146 million, or 2.2 percent of net sales. Last year’s retail food operating earnings were $269 million, or 3.8 percent of net sales. Excluding the impact from the Salt Lake City retail market exit and store closures, retail food operating earnings were $251 million or 3.5 percent of net sales. The decrease in retail food operating earnings as a percent of net sales reflects increased promotional spending and reduced sales leverage on expenses.

Supply chain services operating earnings were $69 million, or 3.3 percent of sales, compared to $64 million, or 3.1 percent of sales last year. The increase in supply chain services operating earnings as a percent of net sales reflects strong expense management and improved productivity.

Net interest expense for the third quarter was $124 million compared to $131 million last year, reflecting reduced borrowing levels. The company remains in compliance with all debt covenants.

Supervalu’s income tax benefit was $21 million, or 9.2 percent of pre-tax loss in the third quarter compared to income tax expense of $68 million, or 38.8 percent of pre-tax income in last year’s third quarter. The tax rate for the third quarter of fiscal 2011 reflects the impact of the impairment charges, the majority of which is not deductible for tax purposes. Excluding the impact of the impairment charges and the sale of Bristol Farms, the tax rate for the third quarter of fiscal 2011 was 37.9 percent.

Capital spending for the third quarter was $142 million compared to $156 million in the prior year. In the third quarter the company completed 20 major remodels, 6 minor remodels and 1 new traditional supermarket, as well as 39 new Save-A-Lot locations. Year-to-date capital spending was $454 million compared to $552 million in the prior year.

Year-to-date net cash flows used for financing activities were $366 million compared to $449 million last year, primarily reflecting lower dividend payments in the current year.

Commenting on guidance, Herkert stated, “Our third quarter ID sales were softer than we had anticipated. We invested heavily in promotional activities that proved to be less than effective. As a result, it is prudent to take down our full-year guidance for ID sales and earnings.” Management now expects a net loss in fiscal 2011 in the range of $7.19 to $7.09 per diluted share on a GAAP basis and adjusted earnings of $1.25 to $1.35 per diluted share when excluding non-cash impairment charges and other costs. Supervalu’s fiscal 2011 guidance includes the following assumptions:

*Net sales for the 52-week fiscal year are estimated to be approximately $38 billion;

*Identical store sales growth, excluding fuel, is projected to be approximately negative 6.0 percent;

*Sales in the traditional food distribution business are expected to decline approximately 3.5 percent, primarily reflecting the transition of the Target Corporation volume to self distribution and the loss of Ukrop’s as a customer due to acquisition by a competitor;

*Consumer spending will continue to be pressured;

*Goodwill and intangible asset impairment charges are $1.8 billion pre-tax, or $1.7 billion after-tax;

*Fiscal 2011 will include the following approximate after-tax amounts per diluted share:

$0.38 in charges related to the completion of retail market exits in Connecticut and Cincinnati and store closure costs relating to the sale or closure of an additional 25 to 30 traditional retail stores;

*$0.12 in severance and labor buyout costs, including the elimination of administrative headcount in the fourth quarter;

*$0.11 in certain other costs related to the impact of a labor dispute at Shaw’s, which was resolved in July, and second quarter charges primarily for employee-related costs.

*$0.31 in gain on sale of Total Logistic Control.

*The effective tax rate is estimated to be approximately 37.4 percent, excluding impairment charges;

*Weighted-average diluted shares are estimated to be approximately 213 million for purposes of non-GAAP earnings per share;

*Capital spending is projected to be approximately $700 million, including 75 to 85 major store remodels, 15 to 25 minor remodels, 3 replacement stores and approximately 100 new hard-discount stores, including licensed locations, net of closures and relocations; and

*Debt reduction is projected to be approximately $850 million, including approximately $200 million of proceeds from the sale of Total Logistic Control.

Commenting on fiscal 2012 capital spending guidance, Herkert said, “We remain committed to aggressively paying down debt, investing in our asset base and shedding non-core operations. This coming year, we will again allocate greater capital to grow Save-A-Lot. For our traditional banners, capital spending will go toward investments in technology to support our business transformation and store remodels.”

The company announced its fiscal 2012 capital spending plan of approximately $700 million. Included in the plan are an acceleration of hard-discount store openings, including licensed locations, and 55 store remodels. No new traditional supermarkets are planned for fiscal 2012.

Former food industry executive Charles W. Hofmeister, 84, died January 19.

A Baltimore native, Hofmeister began his food career in 1942 as a 16 year old part-time clerk with Food Fair Stores and ultimately spent 49 years in the food industry, rising to executive vice president of operations for Super Fresh.

Hofmeister was drafted at the age of 18 for service in WWII. He joined the 82nd Airborne Division 504 Infantry Regiment and was shipped to Europe to join the Battle of the Bulge. During that conflict, he was wounded and captured by the Germans. He was liberated after three weeks, reactivated and then shipped back to the U.S. For his service, he received a Purple Heart and other citations.

Returning in 1946 from his military service, Hofmeister rejoined Food Fair as a grocery clerk. He was later promoted to division grocery head buyer. Overall, his Food Fair career spanned 40 years.

In 1981, Hofmeister joined the Great Atlantic & Pacific Tea Company as vice president of merchandising for the Mid-Atlantic Group. He was later promoted to the positions of group vice president of the Mid-Atlantic Group and executive vice president of the Super Fresh Supermarkets before retiring in 1991.

Survivors include his wife of 54 years, Inge Hofmeister of Severna Park; three sons, Michael Hofmeister (Rebecca), Stephen Hofmeister (Sandra), and Thomas Hofmeister (Donna); and 14 grandchildren.

In lieu of flowers, memorial contributions may be made to the American Heart Association, Memorials Processing Center, P.O. Box 5216, Glen Allen, VA 23058.

Delhaize America announced the set up of its new category management organization February 4, naming the officers and directors who will guide the new streamlined system. In line with the new team, the retailer said it will maintain two locations for managing its business – Salisbury, NC (former procurement headquarters for Food Lion, Bloom, Bottom Dollar, Sweetbay, Harveys and Reid’s) and Scarborough, ME (former procurement headquarters for Hannaford).

The locations chosen were based on proximity to crucial functions such as replenishment, logistics and value-based procurement and the logical groupings of categories to most effectively utilize the existing teams and other resources.

Produce and meat/seafood will be managed from Salisbury. Deli and bakery will be handled from the Scarborough facility. Center store will be divided between the two locations due to its greater scope and volume.

In a letter to the company’s associates announcing the changes, Delhaize America CEO Ron Hodge said: “These decisions will result in change for many of our associates at all levels. Our commitment is to provide the training, development and tools we need to be successful, ensuring a smooth transition to a more powerful way of running our business. Simply put, we will make the best use of our talent and expertise company-wide.”

With the structure of the new category management organization in place, Delhaize also named the officers who will lead the effort going forward. Four officers will have direct responsibility in newly created positions overseeing banner merchandising. Tod Pepin will lead Hannaford and Bloom as senior VP of banner merchandising; Tom Robinson will hold the same post for Food Lion; Geoff Waldau will be the SVP for Sweetbay; and Hans Lefebvre will serve as vice president of banner merchandising for Bottom Dollar.

Four other officers are moving into new positions at the Food Lion banner, while another is in a new role at Harveys and Reid’s. John Barnette becomes vice president of center store for Food Lion. Paul LaCroix will be vice president of pricing and promotions for Food Lion. John Mercer is vice president of produce for Food Lion. Kyle Price is market vice president-launch markets for Food Lion. Barry Robinson becomes vice president of Harveys and Reid’s.

Seven category management leaders will report to Derrick Penick, the recently named senior vice president of category management for Delhaize America, to help guide the new organization. Pete Bonneau is vice president of center store in Salisbury.  Kristen Hanson is vice president of center store in Scarborough.  Lewis Campbell is vice president of pricing, services and shelf management. Jim Corby is vice president of produce. Mark Messier is vice president of meat and seafood.  Peter Vail is vice president of deli and bakery. Tim Jacques is vice president of private brand.

In addition to Penick, five officers will report to Mark Doiron, chief supply chain officer, in positions that support and drive category management. Two are taking on new or expanded responsibilities: David Hilse is vice president of supply chain infrastructure and design. Chris Lewis will remain vice president of services and solutions for Delhaize America and now also oversees value based procurement and strategic sourcing.

The three other officers reporting to Doiron will continue in their current roles: Gerry Greenleaf, vice president of distribution and transportation; Millard Nance, vice president of pharmacy operations; and David Vander Schueren, an SVP for Delhaize America, who is heading the category management initiative.

Additionally, several new directors were named.

The new supply chain directors based in Salisbury are: Jim McWade, value-based procurement ; Jason  Ramsey, pricing; Allen Chickering, shelf management; Scott Libbey, center store; Dave Yandow, center store; Ann Raives, center store; Adrian Baker, center store.

The new supply chain directors based in Scarborough are: John Patriquin, strategic sourcing ; Tim Concannon, pricing; Nancy Dumais, branding in private brand; Marc Lessard, product development in private brand; Peter Forester, deli; Marwan Fakhouri, center store; Fred Snowman, center store.

The new Food Lion directors, based in Salisbury, are: Kevin Oliver, banner merchandising-meat and seafood; Bobby Wilson shrink.

The new Hannaford/Bloom directors are: Tesha Sigmon and Mike Lamontagne, both directors of Bloom, which will be based in Salisbury. And, in Scarborough handling business for Hannaford/Bloom will be: Will Wedge, banner merchandising-fresh; Tony Robidas, banner merchandising-center store; and Dave Ray, price-promo portfolio.

The new Sweetbay directors, based in Tampa, are: Steve Williams, banner merchandising-produce; Eddie Garcia, banner merchandising-deli/bakery and meat/seafood; and Randy Duschaine, banner merchandising-center store.

New Harveys Reid’s directors, based in Nashville, are: Michael Purvis, produce; Dave McMillan, meat and seafood; Michael Duncan, deli/bakery; Joe Campolo, center store; and Roy Wilson, pharmacy.

The company said that, with the leaders of the new team in place, other key roles continue to be filled.

Said Hodge in the associates’ letter: “With these outstanding leaders in place, we are now determining other key roles. We expect to announce those decisions later this month.

“Though this transition is not easy, I’m confident we are on the right path. Together, we will create a strong, innovative partnership between category management and our banners to best serve our customers, associates and business partners.”

Robin Michel has joined Sears Holdings as SVP and president-food and consumables and health and wellness. She will be responsible for the oversight, leadership and growth both in-store and online for the retailer’s food and consumables, health and beauty and pharmacy Business.

“Robin brings to the company a wealth of expertise in the grocery and pharmacy industry, and we are excited to welcome her to our team,” said Bruce Johnson, Interim CEO and president. “Under Robin’s leadership, we’ll be able to uniquely serve our customers by providing them greater value in all areas of health, including wellness, lifestyle, diet, and nutrition while offering over 1000 pharmacy locations nationwide.”

Michel most recently served as president of Giant/Landover, where she was responsible for merchandising, store operations, finance, supply chain, real estate and human resources.

During her extensive career in the grocery and pharmacy business, Michel has held senior leadership roles at companies such as: Roundy’s Supermarkets, Inc., 7-Eleven, Inc., and H.E. Butt (H-E-B) Grocery Company. She started her career with The Kroger Co., and progressed from store director to vice president during her time there.

Michel earned a master’s degree in management from the University of Texas and holds a bachelor’s degree in commerce from the University of Louisville. She also is a graduate of Harvard Business School’s Advanced Management Program.

Michel will be based in the company’s corporate headquarters in Hoffman Estates, IL.

Despite objections from bondholders who questioned the role of Yucaipa Cos. in A&P’s bankruptcy proceedings, U.S. Bankruptcy Judge Robert Drain approved the $800 million loan the bankrupt retailer sought for post-petition financing. The bondholders were concerned that approval of the debtor-in possession (DIP) financing would place them further back in line to be repaid. The hearing was held on January 10 in White Plains, NY.

“I think that’s a fair resolution” Drain said. “It doesn’t resolve issues about the intercreditor agreement. Any issues under that are for another day.”

Edward S. Weisfelner, an attorney for the bondholders, said Yucaipa, one of A&P’s largest shareholders, is rumored to also own large part of second lien bonds, and have a large stake in the DIP loan. He is also quoted as stating, “We think they’re (Yucaipa) all over the capital structure. The debtor told us to talk to Yucaipa, and Yucaipa told us to ‘talk to the wall.’”

According to court papers, Ron Burkle’s Yucaipa Cos. owns all of A&P’s series A-Y preferred stock. A&P’s second-largest stockholder is Aletheia Research & Management. Holding more than five percent of its voting securities are GAMCO Investors, Bank of America Corp., DBD Cayman Islands and Yucaipa.

JPMorgan Chase & Co., the lead arranger of the loan, also has a stake in A&P’s pre-bankruptcy debt and fully underwrote the loan, with permission to syndicate it, court documents revealed.

Drain had initially approved the loan on an interim basis which let A&P draw $187 million from a $350 million term loan and gives it $200 million in credit from a $450 million revolving credit facility. While Drain approved the full DIP financing, it extended from 60 to 90 days the ability of unsecured creditors to investigate pre-bankruptcy agreements.

Landlords also objected to the new loan, noting that it would give lenders a lien on A&P’s (and its subsidiaries) leases, violating terms of the leases which prohibit them from being transferred. Under the loan agreement, if A&P defaults on its DIP loan, the lenders can occupy the premises, attorneys for a number of landlords petitioned. Drain ultimately approved A&P’s original motion to reject some of its leases (including most of its now closed Farmer Jack stores in Michigan).

The final order also approves some $15 million in carve-out allocations for payment of professional fees and legal expenses.

Judge Drain did not rule on A&P’s request for a 35 day extension (from January 11 to February 15) in which to submit its full schedules of assets and liabilities and statements of financial affairs to the court. A&P previously told the court that it requested the extension “because the nature and scope of its operations require it to maintain voluminous records and intricate accounting systems” coupled with the reality that certain pre-petition invoices have not yet been received or entered into its accounting systems.

In A&P news related to its supply chain, a C&S Wholesale Grocers subsidiary, Woodbridge Logistics, late last month filed a notice with the New Jersey Labor Department that it could lay off as many as of 1,114 associates who are employed at six Garden State distribution centers that the Keene, NH wholesaler utilizes to supply A&P stores, effective February 6, a day after its seven year contract with Teamster Local 863 expires. The layoffs would take place at all at depots in New Brunswick, North Brunswick, Dayton and three locations in Woodbridge.

C&S (Woodbridge Logistics) is reportedly seeking substantial savings in its negotiations, both in wages and benefits. The large, privately-held wholesaler is also undoubtedly protecting itself against the declining A&P sales and whatever other losses may occur as the Tea Company begins the long and complex task of reorganization.

When it sought Chapter 11 status on December 12, A&P partially attributed its bankruptcy filing to an inability to renegotiate terms of its contract with C&S, its primary supplier. Although C&S did not appear in the initial filing of largest unsecured creditors, an amended filing stated that the wholesaler was owed $10.7 million by A&P. The retailer reportedly receives about 70 percent of its goods from C&S or its subsidiaries.

And according to published reports, A&P informed the court that vendors with long term contracts are not part of the debtors’ proposed (reorganization) program, adding that it will enforce its rights in court if such vendors use the Chapter 11 filings or the debtor’s financial condition as an excuse to suspend shipments, modify payment terms or otherwise impair its rights.

A&P also announced that executive chairman that Christian Haub will no longer serve the company in an executive capacity. He will remain as chairman of the board. The removal of Haub from the Tea Company’s day-to-day business completes one of the worst individual legacies of failure in supermarket history. Haub, whose family business, The Tengelmann Group, has controlled A&P since 1978, joined the Tea Company in 1991 and has been president, co-CEO, chief executive or executive chairman since 1992.

A C&S Wholesale Grocers subsidiary, Woodbridge Logistics, filed a notice with the New Jersey Labor Department last month that  it could lay off as many as  of 1,114 associates who are employed at six Garden State distribution centers that the Keene, NH wholesaler utilizes to supply A&P stores, effective February 6, a day after its seven year contract with Teamster Local 863  expires. The layoffs would take place at all at depots in New Brunswick, North Brunswick, Dayton and three locations in Woodbridge.

C&S (Woodbridge Logistics) is reportedly seeking substantial savings in its negoatiations, both in wages and benefits. The large, privately-held wholesaler is also undoubtedly protecting iteslef against the declining A&P sales and whatever other losses may occur as the Tea Company begins the long and complex task of reorganization.

When it sought Chapter 11 status on December 12, A&P partially attributed its bankruptcy filing to an inability to renegotiate terms of its contract with C&S, its primary supplier. Although C&S did not appear in the initial filing of largest unsecured creditors, an amended filing stated that the wholesaler was owed $10.7 million by A&P. The retailer reportedly receives about 70 percent of its goods from C&S or its subsidiaries.

And according to published reports, A&P informed the court that vendors with long term contracts are not part of the debtors’ proposed (reorganization) program, adding that it will enforce its rights in court if such vendors use the Chapter 11 filings or the debtor’s financial condition as an excuse to suspend shipments, modify payment terms or otherwise impair its rights.