Supermarket giant Albertson's to close 165 stores in 25 states, eliminate jobsgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Supermarket giant Albertson's to close 165 stores in 25 states, eliminate jobs By Mark Warbis ASSOCIATED PRESS July 18, 2001
BOISE, Idaho – Supermarket giant Albertson's will close about 165 stores in 25 states and eliminate up to 20 percent of managerial and administrative jobs above the store level, the company announced Wednesday. Its stock price rose more than 5 percent.
The exact number of jobs that will be eliminated had not been determined, said Ertharin Cousin, Albertson's senior vice president for public relations and government affairs.
Albertson's has about 235,000 employees, of which about 8,000 fall into the targeted categories. That could mean the elimination of up to 1,600 jobs.
The cuts are aimed at reducing operating costs as the nation's second-largest food and drug retailer continues to struggle with its 1999 acquisition of American Stores, its new chairman and chief executive said.
"The major actions announced today are just the first in a series of long-overdue steps that are necessary to begin unleashing the vast potential of this company," Larry Johnston said in a statement.
In midday trading on the New York Stock Exchange, Albertson's shares were up $1.53 at $30.35.
The American Stores acquisition more than doubled the number of Albertson's-owned outlets to more than 2,500 in 36 states.
Cousin said the company would not detail where store closures would occur, but said about 25 percent of closures would be stand-alone drug stores, which Albertson's operates under the Osco Drug and Sav-On names.
The company also has food and drug stores under the names Acme Markets, Jewel Food Stores, Seessel's, Super Saver and Max.
Albertson's reported a 4 percent increase in first-quarter profits and posted net income of $186 million or 46 cents per share on $9.3 billion in sales for the 13 weeks through May 3.
Johnston said the "major roadblocks in the 1999 American Stores Company merger are behind us," but Albertson's needs to cut overhead through "a significant number of permanent layoffs."
Albertson's said it would offer voluntary separation to longtime administrative and managerial personnel with a severance package that includes job placement services.
The company said it expects to record nonrecurring charges of about $585 million before taxes to cover the cost of restructuring. Personnel cuts are expected to reduce costs by $100 million a year.
-- Martin Thompson (firstname.lastname@example.org), July 18, 2001