Empire Co. Ltd., the Nova Scotia-based owner of Sobeys, is closing down 50 stores to improve its net earnings. Approximately 60 per cent of the stores are located in Western Canada.
According to the company in a press statement, the decision will “improve net earnings as a result of cost savings; however it will result in a reduction in future sales of approximately $400 million, or 1.9 per cent of total sales.”
Empire’s fourth-quarter adjusted net earnings grew from $95.7 million last year to $131.3 million this year. Its sales rose by $1.68 billion or 39.5 per cent due to its recent purchase of the Safeway chain of grocery stores. Not including Safeway, the company’s sales rose by 2.2 per cent, while same-store sales grew by 0.2 per cent in the quarter.
300 workers are affected by the closures, but according to the company, several workers will be able to move into other unionized locations. Sobeys says its restructuring costs, including $137.1 million in severance pay, site closing and other costs, would add up to approximately $169.8 million.
