Penn Traffic Co. (fka PTFCQ)

[Blue54]

I'm not sure if this news article has been posted already or not, so here it is.

http://investing.businessweek.com/research/stocks/news/article.asp?docKey=600-201002070933KRTRIB__BUSNEWS_23838-5743M9G6RUBE8V786M4K6985PC¶ms=timestamp||02/07/2010%209:33%20AM%20ET||headline||Tops%20gets%20ready%20for%20the%20next%20act%3A%20President%20outlines%20plans%20for%20integrating%2079%20stores%20into%20existing%20operations%20%5BThe%20Buffalo%20News%2C%20N.Y.%5D||docSource||The%20McClatchy%20Company||provider||ACQUIREMEDIA||realtedsyms||%7CUS%3BPTFC&ticker=PTFC:US

Tops gets ready for the next act: President outlines plans for integrating 79 stores into existing operations [The Buffalo News, N.Y.]
Recent PTFC News
Gillibrand adds voice to Tops issue: Seeks to protect jobs, rural stores [The Buffalo News, N.Y.]
02/05/2010 8:51 PM ET
Tops expects to decide fate of its new stores here next month [The Daily Review, Towanda, Pa.]
02/02/2010 5:38 AM ET
BRIEF: BUSINESS: Tops closes Penn Traffic deal [Lockport Union-Sun and Journal, N.Y.]
01/30/2010 8:12 PM ETFeb. 7--Tops Markets executives figured they accomplished a major feat shifting from being a piece of a global grocery company to an entirely local operation -- embarking on a $150 million capital improvement plan and rebuilding the company's infrastructure, computer and accounting systems from scratch.

It turns out, that was just its opening act.

Just seven months after moving away from a shared services arrangement with its former owner, Ahold, to became a stand-alone company under Morgan Stanley Private Equity, Tops has more than doubled its size with its purchase of bankrupt Penn Traffic's 79-store grocery chain.

And while the bankruptcy case itself was a long and complicated process, now the real work begins for the Williamsville-based grocer.

"We've got to get the stores back to their normal condition before we can start making improvements," said Frank Curci, Tops' president and chief executive officer. "We plan to [renovate] more stores than fewer. We will have to prioritize and decide what will give people faster returns."

Last week, the Williamsville Quality market was bustling. Inside the popular Main Street store, just down the street from Tops' headquarters, employees were taking painstaking inventory of items on shelves and checking expiration dates.

Stock was noticeably thin, with several wide, empty gaps on shelves and in coolers. A large, wooden magazine rack was bare, save for a handful of titles.

An employee said the store was "keeping things light" on the shelves. Standard items, such as milk and bread, which sell quickly, were being replenished often, but even such staples as cheese slices and orange juice were sold out in some categories.

For the rest of the month, the stores are being operated out of Penn Traffic's Syracuse headquarters through a transition services agreement. That means they will continue to run under Penn Traffic ads, promotions and policies. Once the 30-day agreement is up, Tops will take over, bringing Tops' private label brands with it and slowly bringing the stores back to life over a period of three to six months.

Curci acknowledged the importance of quickly filling those current gaps on shelves once Tops gets control of the stores, lest current shoppers start looking elsewhere to fill their needs.

"As you can imagine, these stores have been capital-starved for years," said Curci. "Right now we've got to figure out the condition of the company, then clean up the stores, get them filled with merchandise and [hire more people.]"

In doing that, Curci asked consumers to have patience with the company as it brings some 79 new stores into the Tops fold.

"We can't do everything in one year. Penn Traffic didn't go into bankruptcy overnight, and the stores aren't going to be up to our standards overnight, either," said Curci. "There were smart people running the company, but they were in a position where their hands were tied. It's difficult running a company under bankruptcy. These stores were underinvested in."

That's something Tops plans to change with a "very robust" capital investment plan, the exact budget of which has yet to be decided upon, but which is expected to be in the tens of millions.

First on the list is a series of maintenance repairs that had been neglected during Penn Traffic's capital-starved years. Another major focus is to bring the stores' perishables up to snuff. Once those areas have been stabilized, the company can begin remodeling the locations to look and act more like contemporary Tops stores.

The stores will remain open throughout the changeover, though some 24-hour stores may close briefly overnight for conversion of their computer systems.

Right now, Tops is working feverishly to decide which stores will remain open and which will be sold or closed outright. The company is determining the financial viability of each store, researching the surrounding markets and their ability to support a Tops.