Pathmark Stores hopes it's finally on the upward path. The largest banner belonging to long-struggling grocery operator A&P, Pathmark operates about 110 supermarkets under the Pathmark and Pathmark Sav-A-Center banners in densely populated areas in four states: Delaware, New Jersey, New York, and Pennsylvania. Many of its stores are Pathmark Super Centers, which offer an expanded selection of general merchandise and foods, nearly all have pharmacies, and more than half have in-store banks. Pathmark's owner, A&P, in 2012 emerged after 15 months in Chapter 11 bankruptcy as a private company following a financial restructuring and the closure of many stores, including about half a dozen Pathmark locations.
A&P's Chapter 11 filing capped four consecutive years of unprofitability for the grocery operator. (Bankruptcy documents listed $2.5 billion in assets and $3.2 billion in debt for A&P as of September 2010.) Pathmark's poor performance contributed to A&P's woes and helped drive the company into bankruptcy.
A&P was already struggling when it acquired Pathmark in late 2007 in a deal valued at $1.4 billion. The debt incurred in the Pathmark acquisition, coupled with declining total and same-store sales and traffic at Pathmark stores, contributed to A&P's overall unprofitability and collapse.
Privately-held A&P no longer releases financial results for its grocery chains. However, previous financial filings show that Pathmark contributed more than 40% of A&P's annual sales. In fiscal 2011 (ends February) Pathmark's sales declined by more than 10%.
A&P's post-bankruptcy comeback strategy for Pathmark and its other banners is focused on localization. The plan involves tailoring each store's merchandise to its neighborhood. Renovations at a Pathmark supermarket in Weehawken, New Jersey exemplify the effort by catering to a largely Hispanic population. Similarly, the Pathmark store in Bergenfield, New Jersey offers its many Jewish customers expanded selections of kosher foods. A&P, which shuttered some Pathmark stores during its restructuring, has recently denied rumors that it planned to sell its Pathmark stores in the Philadelphia region. – less
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