The Fresh Market exiting California
The Fresh Market exiting California
The Fresh Market Inc., a growing specialty grocery retailer, will be exiting the California market. The stores will be closed to customers by March 31. The company also announced it will focus on growth opportunities in the eastern half of the United States, expecting to add nearly 20 stores this fiscal year.
“After careful consideration of expected future cash flows, the long-term strategic importance of individual stores, and the anticipated timeline of store openings in California, the company has decided to close its operations in California — which include stores in Palo Alto, Santa Barbara and Laguna Hills — in order to focus on higher growth opportunities,” the company said in a press release.
Despite the improving results of these stores in California, Fresh Market concluded that the pace of organic store growth was going to be slower than anticipated. The company believes it can achieve more consistent financial results and a better return on its investments by continuing to grow in markets within or closer to its existing markets at this time.
As a result of the store closures, the company anticipates additional charges in fiscal 2015 of approximately $20 million to $26 million related to the recognition of lease liabilities, asset disposals, severance and other costs associated with the closure of operations in California.
In 2015, the retailer plans to open approximately 19 new stores, with the majority of them opening in the latter part of the fiscal year. "These stores will be within or located close to our existing markets in the eastern half of the United States," Sean Crane, interim chief executive officer, said in a press release. "We are committed to building upon our strategic initiatives to continue to provide greater value for our customers, employees and shareholders.”
