Alco focused on turnaround efforts

Just three weeks after Alco appointed a brand new board of directors, the company reported a net loss of $7 million in the second quarter, compared to net earnings of $800,000 a year earlier, thanks in part to growing costs of advertising, new stores and store support.



Net sales in the quarter fell 6% to $110.7 million, from $117.7 million. Same-store sales dropped 8.9%. But Stanley B. Latacha — who was appointed interim CEO a few days after the new board was elected — remains positive. He emphasized the company’s efforts to develop and implement a turnaround plan, adding that he and the board are wasting no time addressing the operational needs of the business as well as analyzing strategic alternatives, including overhauling its balance sheet and evaluating options for raising additional capital.



"We are in the process of developing a strategy with our key financial stakeholders, including existing lenders, vendors, stockholders and landlords to create a long-term solution,” Latacha said. “The details of a recapitalization have yet to be finalized, but we are reviewing several alternatives. There is no pre-determined outcome to this work. Our highest priority is crafting a solution that maximizes value to all of our stakeholders."



Latacha also said that the entire Alco leadership team is focused on executing the company's vision, adapting to an evolving retail environment and driving sustainable change. He stressed that there remains a strong need in smaller markets for the hands-on, community-based approach that Alco offers.



"We have spent the past three weeks trying to get our arms around the business. While we fully understand the implications of the underlying financial and operational issues, we also remain committed to our unique customer value proposition," he added.