Tops’ Operations Strong
Tops Looks to Restructure Operations
By Sharon Witchy
On February 21, 2018, Tops Markets announced its Chapter 11 filing. A television segment on Spectrum News highlighted the frustration that some shoppers felt when they heard the news. That frustration is palpable when you listen to their personal dilemmas. There is a portion of the shopping public that comes to rely on their hometown stores because they have issues with transportation. Stores that are on bus lines or within walking distance of livable communities become very important. News like a Chapter 11 filing makes those customers nervous.
What does a Chapter 11 filing mean to Tops’ loyal customers? All told there are 169 Tops stores in New York, Pennsylvania and Vermont. That is a lot of customers to worry about.
A Chapter 11 filing, at this point in time, means little to the customer as far as Tops Markets is concerned. A press release posted on the company’s website states that Tops’ operations are strong. Mr. Frank Curci, Tops Markets’ chairman and CEO is quoted in that release as saying “we are continuing to provide our customers the convenience, savings and friendly service that they expect from us.” The plan is for the day to day operations to remain the same.
A Chapter 11 filing is made in court and must be approved. In Tops Markets’ reorganization, many things must be taken into consideration. There are over 14,000 employees’ salaries, health care, pensions and 401 Ks to cover. Most of the employee concerns are protected by union agreements and in the case of pensions, by law. Landlords, wholesalers and smaller vendors will have a say in the reorganization. The key is for the plan to be acceptable to those to whom Tops owes money so that Tops can reduce its debt. One of the goals is for Tops to continue to upgrade its stores if the reorganization plan is approved.
Competition in the grocery industry is fierce and it seems as if every big business wants a piece of the action. Speculation is that Amazon, Walmart or other entities are to blame for Tops’ troubles. While that may be a part of the problem, a business doesn’t operate in a void. Analysts cite reasons such as Private Equity groups that buy chains and pay themselves at the cost of the business they own. Such was the case with Tops in 2007 when it was acquired by one such firm-Morgan Stanley. Dividend payouts to Morgan Stanley investors and funds borrowed through lines of credit pushed Tops into greater and greater debt. Despite all of the controversy and speculation, Tops Markets will continue to do what it already does through the reorganization process.
Local Tops management teams referred all media inquiries to Kathy Romanowski, a Tops Media Representative. As their website and press release offered generalized statements, I asked her to define what Tops refers to as an “exceptional shopping experience.” Her response included the affordability of their products as well as savings on gasoline: customers earn points from grocery purchases that can be redeemed for savings on gasoline purchases. Tops Markets also caters to the couponing crowd with multiple coupon programs. She also cited their Price Lock Guarantee, BonusPlus Card Savings, 10 for 10 and The Wall of Value, citing “all of these offer our valued customers great ways to save money each and every time they shop with Tops”. A partnership with Instacart helps customers save time shopping as a customer’s order can be delivered in as little as one hour. These savings plans and services will remain in place as the reorganization moves forward. Tops’ valued customers hope only for the reorganization to be a success.