RUH-ROH, WSJ report: A&P may file Chapter 11

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DerangedHermit
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RUH-ROH, WSJ report: A&P may file Chapter 11

Post by DerangedHermit »

http://online.wsj.com/article/SB1000142 ... 58524.html
A&P, the grocery-store chain with roots dating to the 1800s, is preparing to file for Chapter 11 bankruptcy protection as soon as this weekend, a person familiar with the matter said.

The grocer, whose full name is Great Atlantic & Pacific Tea Co., is negotiating for financing that would keep it afloat during bankruptcy proceedings, this person said. It isn't clear how much financing A&P is trying to raise.
Not unexpected, but to see how far A&P and Pathmark have fallen is insane.
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Re: RUH-ROH, WSJ report: A&P may file Chapter 11

Post by klkla »

It just seems to be the history of this company since the Haub's became involved in the 70's. It's a shame that the company has been allowed to be this mis-managed for so long.

A&P's real estate is very valuable. Hopefully the Haub family's common stock holding will be wiped out for good and the company will have a decent chance at reorginzation if the BK happens.
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Re: RUH-ROH, WSJ report: A&P may file Chapter 11

Post by werememberretail »

(Disclaimer I do NOT nor have I ever worked for or owned any equity in The Great Atlantic and Pacific Tea Company Incorporated, however I am a former loyal customer, and private Industry observer/ historian )

Great Scooby Doo impression DerangedHermit.

but getting to the serious end. I Must paraphase the radio scion Rush Limbaugh and say "see I told you so!" in regards to A&P's long running decline.

I have to correct you Kikla regarding the Haub Family. actually it''s only been in the past 20 years that the Haub family has been misoperating this once-great quintessential American retail Institution Prior to that the opposite could have been said. A&P was actually rescued from the brink of extinction when Ervian Haub bought control of the A&P from the Hartford foundation in 1979 and in the first ten years it actually turning around bigtime. Most of this was because of smart CEO named james Wood who was hired away from the Grand Union chain in 1980. Wood abandoned operations in money losing markets like Chicago where it could not compete, built up sttronger markets where it had the best chance for success like NYC/NJ metro where it bought a bunch of stores in the 1980s-17 Stop and Shops in NJ (launching the fresh-oriented, green colored original Sav A Center store campaign from these stores), The gourmet Food Emporiums and of course Waldbaum's in the upper bouroughs and New England. renegotiated with Philadelphia union bosses to revive the dormant Philadelphia division as Superfresh, using the perishable heavy SavACenter concept expanding older stores, and launching a series of forward thinking advertising campaigns. It was a high flyer in the late 80s until the recession but still chugged along into the mid 90s. The real decline of A&P came when Christian Haub Erivan's son became the head, succeeding the retiring Wood. it was not the father who killed the firm it was the son.
'

The A&P's inability to compete on price ( in some cases a hindrance since its WEO days ) its lateness to ramp up store expansion and fresh foods offerings in a big way, in other words being a late comer to the fresh format and its union problems were the big problems before pathmark. Pathmark exacerbated these problems. but it wasn't totally pathmark's fault. Pathmark actually was getting its act together in the last years of independence. it did'nt need A&P to turn itself around . Burkle was putting it on the right track and given a few years w/o A&P mismanagment it could have been a winner. the real culprit to the slow painful death of A&P was and is Christian Haub, from the beginning he closed stores and turned tail from neighborhoods when he should have been testing new formats. He got out of numerous markets like a dog with its tail between its legs-Richmond Atlanta, New Orleans,Milwaukee,Detroit,Ontario Canada and with the exception of NYC
became an also ran in its other markets, especially its historic Philadelphia division, which began losing more and more business to Shoprite in the urban areas and Giant?Carlisle in the suburbs. not to mention up and comers like Aldi/Trader Joe's Whole Foods Wegmans Target and Walmart. It was no surprise that James Wood after his retirement from the company publically stated that he did not like the way Christian Haub was running A&P.



Of course the aquisition of pathmark killed what was already sick and ruined a potential comeback foe both companies. A&P relied too heavy on making a not so cheap Pathmark (A joke compared to Shoprite) the volume driver while neglecting Food Basics. they ruined what made Pathmark good, they diminished the amount of good specials they traded in good quality pathmark brands like ChefMark in exchange for the lower quality America''s Choice brands especially in their Delicatessens, a Pathmark stronghold. It can be documented that customers, once loyal Pathmark customers, began abandoning Pathmark and going elsewhere. In Philly they turned most of their low volume Superfreshes into Pathmarks but that hasnt helped. The (Pathmark) sav-a-center concept has been a big flop for A&P.

the lone bright spots for the Tea company during this period was its hirings of Eric Claus who was responsible for upgrading both the conventional stores and the discount Food Basics stores (unfortunately to be ousted a few years later) and his successor Ron Marshall. who launched a valiant effort to lower prices. however perhaps both thought A&P was a dead duck that could not be saved under current ownership. Both are gone and now Haub hired a gentleman named Sam Martin to run this fading company.



I visit irregularly a number of A&P/Superfresh/Pathmark stores in PA and NJ and they are a disgrace. poor condition stores , low volume and lackadasical employees abound. a number of these stores have not been remodled since the 90s or early 2000s. one Superfresh store in NJ has not been remodeled since the early 90s, and these are stores that are close to Shoprites, Acme (another fall from grace story but not nearly as bad) and Walmarts, now with Delihaize opening Bottom Dollar stores in the area A&P looks even worse.


I agree with kikla
the Haubs need to have their equity wiped out. I concur with Gerry Maynes AKA MaynesG who contributes to the forums here and at Groceteria when he referred to A&P as R.I.P markets (rest in peace) because this is the condition that it is in now. I credit Ron Burkle (a good grocery man who has a track record of buying bad grocery chains and turning them into winners...,.and has made billions doing it ) for buying the company's debt. He's probably the last hope for this company. maybe if Chris Haub and his backwards thinking are out of the picture maybe some of A&P can be salvaged. but only time will tell.
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