The owners of the Food Town grocery chain confirmed yesterday they are exploring unnamed options for the stores, two days after The Blade revealed Spartan Stores, Inc., had hired an investment banking firm to find a buyer or partner for the financially struggling operations.
Spartan said it hopes to determine a course of action by the end of April.
To stem some of its money troubles, Spartan also said yesterday it will close its only Toledo area distribution warehouse for the groceries, eliminating 150 jobs within 60 days. The warehouse is at 1020 Ford St. in Maumee.
Spartan said it has hired Food Partners, Inc., a Washington, D.C., investment banking firm that specializes in the food industry, to ‘‘explore alternative strategies” relating to Food Town.
The owners made it clear that their 21 Pharm discount drugstores bought with the Food Town chain in 2000 are not on the block.
However, the company declined to say what alternatives it is considering for the groceries, or whether store closings are possible.
‘‘We are looking at a number of different options, but we're just in the exploration of those options right now,” said Spartan spokesman Jeanne Norcross. “It wouldn't be appropriate to get into the options right now.''
The Blade, in an article Sunday based on knowledgeable sources who spoke only on the condition they were not identified, disclosed that Spartan had hired an investment banking firm at least a month ago to help it find a buyer, partner, or new financial investors for the 39 Food Town stores in northwest Ohio and southeast Michigan.
Prospective buyers had been made aware the stores might be for sale, and Spartan's planned refinancing last summer specifically excluded accounting for the Food Town stores, The Blade reported.
For that story, Ms. Norcross denied that Spartan was for sale and called reports of the investment banking firm rumors.
“If there were something to share, we would,” she said last week.
But yesterday Spartan filed a disclosure of its action with U.S. Securities and Exchange Commission. The Grand Rapids, Mich. company would not select a course of action until the options are examined, Ms. Norcross said, and that should be completed possibly by the end of next month but by the end of April at the latest.
Spartan, which owns 94 grocery stores and a food-wholesaling business, has struggled almost since its purchase of Food Town with its performance in the highly competitive Toledo grocery market. Its poor quarterly financial statements have been attributed largely to the weak performance at its Toledo area groceries. The firm closed six underperforming Food Towns and four Pharms. Food Town has lost Toledo market share, dropping to 24 percent from 28 percent two years ago.
“All options under consideration are intended to more rapidly return our overall retail operations to profitability,” Spartan Chief Executive James Meyer said in a statement yesterday.
To further cut costs, Spartan told its drivers and other workers at the Maumee warehouse that it will close in two months.
It will supply Food Town and Pharms stores from its warehouses in Plymouth and Grand Rapids, Mich., Ms. Norcross said.
Bill Lichtenwald, president of Teamsters Local 20 in Toledo, admitted being surprised by the closing, even though there have been concerns about it ever since Spartan bought Food Town.
The union was told yesterday, he said, and he expressed hope that some locally displaced workers may be able to transfer to the Plymouth warehouse, where workers also are represented by the Teamsters.
Spartan, which is to release its financial performance Feb. 12 for the quarter ending Jan. 4, also said yesterday that financial report will include non-cash charges to goodwill and other asset balances.
The announcement yesterday met with little interest from investors. The company's stock, which has plunged from $16 a share two years ago, dropped 3 cents to close at $2.94 a share on the Nasdaq national market.