Fresh Market to exit California; will open 19 stores in 2015
Greensboro, N.C. – The Fresh Market Inc. will close its remaining stores in California, which include locations in Palo Alto, Santa Barbara and Laguna Hills, by March 31 in order to focus on higher growth opportunities. The decision comes even as adjustments to promotions and pricing helped drive impressive fourth quarter results.
Fresh Market also plans to approximately 19 new stores during fiscal 2015. This includes two new stores opening in the first quarter; five to six new stores opening in the second quarter; and 11 to 12 new stores opening in the second half of the year. Fresh Market also plans to remodeling or refresh 10 stores, with the majority completed in the first half of the year.
These stores will be within or located close to existing markets in the eastern half of the U.S.
Net income for the fourth quarter of fiscal 2014 was $20.2 million, roughly 10 times to $2 million reported in the same quarter a year earlier. Higher gross margin triggered by rationalization of promotional activity and pricing on select items, as well as reduced supply chain costs, allowed Fresh Market to achieve this profit improvement despite continued product cost inflation.
“During the quarter, we successfully took steps to grow customer transactions, expand gross margin and leverage our cost structure,” said Sean Crane, interim CEO. “Looking forward, we remain focused on our key growth strategies, including opening new stores in our core markets and continuing to increase shopper frequency.”
As a result of the store closures, Fresh Market anticipates additional charges in fiscal 2015 of approximately $20 million to $26 million. The stores will be closed to customers by March 31, 2015 and the company expects store closure activities to be completed in fiscal 2015.
For the full fiscal year, net income rose 24% to $63 million from $50.8 million. Net sales were $1.75 billion, a 16% increase from $1.51 billion, while same-store sales increased 2.9%.