Tops completes financial restructuring
- Tops Markets has completed its financial restructuring and emerged from Chapter 11, according to a company release. The company says it has reduced its debt by $445 million, with over $100 million in liquidity resulting in a stronger balance sheet.
- This has allowed the company to continue to invest in its stores, expand existing services, roll out new services and create a better shopping experience for consumers. The company also resolved pension and labor issues that it faced at the start of its Chapter 11 cases.
- “We are moving forward as a stronger Company with an even greater ability to provide convenience, savings and friendly service to customers across our communities," Frank Curci, Tops CEO, said in a statement. We are investing in our stores and rolling out new services that make shopping with us even easier."
The end of Chapter 11 gives Tops the opportunity to invest in the stores it has, but the company has a lot of catching up to do in order to compete with Walmart, Wegmans and other major northeast retailers.
The company says it plans on using its liquidity to strengthen existing services and create new ones. Currently, the company offers delivery from the majority of its 169 stores through Instacart. Tops has also trialed a grocery pickup service with the e-commerce provider — a service that Instacart just took nationwide.
Holiday promotions have been a bright spot for Tops in the past, so its exit from restructuring comes at a good time. Last season, the grocer ran a "Price Lock Guarantee" that kept prices low during the holidays along with a “Christmas Bonus” promotion that offered gift card discounts to consumers who spent a certain amount. Both promotions are back this year, along with other special offers available through the company's BonusPlus savings program.
Although these online and in-store services might shrink company margins, Tops desperately needs to drive traffic to its stores in order to compete against Walmart and Wegmans, its main competitors.
Walmart has launched free curbside pickup at 2,100 stores and same-day delivery in dozens of markets. The company has also boosted its fresh assortment and remodeled stores to make them more attractive and easier to navigate. Meanwhile, Wegmans has also steadily expanded online shopping and is currently piloting a separate ordering app for its wildly popular prepared foods selections.
Tops' financial woes were due in no small part to mismanagement in years past. The company will make sure no to repeat those mistakes, but it also needs to stay on top of its assortment, promotions, online shopping and so much more. If not, larger and more price-focused retailers will continue to steal market share away from the conventional grocer.
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