Grocery Outlet Holding Corp. (NASDAQ: GO), the Emeryville, California-based parent company of the Grocery Outlet chain of bargain-priced supermarkets, announced it is closing 36 stores following dismal fourth quarter earnings that resulted in a roughly $235 million operating loss and a net loss of more than $218 million.
In a statement, the company unveiled an “Optimization Plan that provides for the closure of 36 financially underperforming stores, including the termination or sublease of the applicable store leases, the termination or sublease of a lease for a distribution center facility that we are no longer utilizing, and the termination of operator agreements with independent operators for the applicable store locations as well as certain other store locations.”
The 36 stores account for 6% of the Grocery Outlet locations. President and CEO Jason Potter used an earning call to reveal 24 of the stores are on the East Coast.
“We are not fully exiting any state, and we believe we have a meaningful opportunity to grow in the East over the long term, however, it’s clear now that we expanded too quickly,” Potter said.
The company operates more than 560 stores across 17 states, with most locations based in California. It also has a presence in Delaware, Idaho, Maryland, Nevada, New Jersey, Ohio, Oregon, Pennsylvania, Virginia and Washington. Gordon Brothers, the global asset experts, has been retained by Grocery Outlet to market a portfolio of retail leaseholds and related furniture, fixtures and equipment from the stores targeted for closing.
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