Fairway CEO steps down; grocer posts 3Q loss
NEW YORK (AP) — Shares of Fairway tumbled in aftermarket trading Thursday after the grocery chain reported a loss in its fiscal third quarter and said its CEO is stepping down.
The company said Herbert Ruetsch is retiring after two years as CEO and 15 years with the company. William Sanford, who has been president of the company since April 2012, will become interim CEO. Fairway said it will start a search for a new CEO soon, and it will consider candidates from inside and outside the company.
Ruetsch, who has been with the company for 15 years, will continue to advise Fairway.
The management changes come as the company said it lost $31.3 million, or 74 cents per share, for the three months that ended on Dec. 29. A year earlier it took a loss of $51.8 million, or $4.20 per share. Revenue grew 23 percent, to $205.7 million from $167.3 million.
Overall sales rose as Fairway opened more stores. But sales at stores open at least a year fell 1.7 percent, and those sales are considered a key measurement of retailer performance. The company said last year's quarter benefited from shoppers stocking up on food and supplies at its stores before and after Superstorm Sandy.
Fairway, which has stores in New York, New Jersey and Connecticut, also said it will streamline its business to "remove redundant costs." It expects to pay $7 million in severance over the next year. The company expects to save $3 million to $4 million annually from the cuts.
Messages left seeking further details were not returned.
Shares of Fairway Group Holdings Corp. skidded $1.43, or 12.5 percent, to $10 in aftermarket trading. The company's April initial public offering priced its shares at $13 each. The stock has ranged from $10.95 to $28.87 since.