SpartanNash Company, which is the parent company to local Martin’s Super Markets in Southwest Michigan, reports today the resignation of the company’s Chief Executive Officer and the decision to exit a unit called Fresh Kitchen operations in Indianapolis.
The company, headquartered outside of Grand Rapids in Byron Center, says today that its Board of Directors has appointed the Company’s Chairman, Dennis Eidson, to the additional roles of Interim President and CEO, effective immediately.
That news comes on the heels of the resignation of President & CEO Dave Staples who leaves not only the company, but the SpartanNash Board as well.
Eidson will serve in those additional roles until the next CEO is identified. He already had served as CEO from 2008-2017, and previously served as SpartanNash’s President, Chief Operating Officer and Executive Vice President of Marketing and Merchandising during his 16-year tenure with the Company. The Board also announced that it had accepted the resignation of Staples.
Douglas Hacker is Lead Independent Director for the SpartanNash Board. He says, “The Board remains confident in the company’s strategic direction and its ability to generate top line growth; however, execution has fallen short of our expectations and we believe that now is the time for a leadership change.” Hacker adds, “I want to thank Dennis for returning to the leadership position to guide the company’s efforts in revitalizing performance and maximizing long-term shareholder value.”
Hacker continues, “On behalf of the Board, I also want to thank Dave for his contributions to SpartanNash throughout his tenure. Since joining the Company in 2000, Dave has presided over numerous successful business initiatives and has been instrumental in driving SpartanNash’s growth. We wish him well in the future.”
For his part, the returning Eidson says, “I am confident in the strength of our platform and look forward to working with our talented team to deliver improved performance,” adding, “Our focus will be on enhancing our distribution business, driving operational execution and organizational development while positioning SpartanNash to achieve long-term profitable growth and improved value for shareholders. In order to provide transparency, we have elected to preview our second quarter financial results, as well as our current outlook for the balance of the year.”
At the same time as the leadership change, the SpartanNash Board also announces the decision to exit its Indianapolis-based Fresh Kitchen operations to improve operating earnings and EBITDA results, within the Food Distribution segment. The company will shift its focus and expertise to its produce distribution and Fresh Cut operations, which have been the hallmark of the Caito business. The Fresh Kitchen, which was acquired in 2017 as part of SpartanNash’s acquisition of Caito Foods, is a newly constructed facility that cooks and packages fresh protein-based foods and complete meal solutions for a number of different customers.
The annual net sales impact of exiting the Fresh Kitchen operations will be approximately $20.0 million. Second quarter preliminary earnings from continuing operations include approximately $14.0 million of asset impairment expenses associated with Caito’s Fresh Operations. The company expects to complete its transition by the end of fiscal 2019.
As a result of the changes announced today, SpartanNash is providing preliminary results for the 12-week second quarter ended July 13, 2019, and an updated fiscal 2019 outlook. The company expects net sales for the 12-week second quarter ended July 13, 2019 to be $2.00 billion compared to net sales of $1.90 billion for the second quarter of fiscal 2018.
The company’s updated guidance for the fiscal year ending December 28, 2019 does not include costs associated with the CEO transition and costs from a non-recurring, supplemental, transition incentive program for eligible associates.
SpartanNash is a Fortune 400 company whose core businesses include distributing grocery products to a diverse group of independent and chain retailers, its corporate-owned retail stores and U.S. military commissaries and exchanges; as well as premier fresh produce distribution and fresh food processing.
SpartanNash serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Bahrain, Djibouti and Egypt. They currently operate 160 supermarkets, primarily under the banners of Family Fare Supermarkets, Martin’s Super Markets, D&W Fresh Market, VG’s Grocery, Dan’s Supermarket and Family Fresh Market. Through its MDV military division, SpartanNash is a leading distributor of grocery products to U.S. military commissaries.