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Cohen & Steers Global Realty Majors ETF Message Board

  • I_might I_might Apr 26, 1998 9:17 AM Flag

    Management's letter

    Gristede�s Sloan�s Inc.
    John A. Catsimatidis
    Chairman

    March 10, 1998

    To Our Shareholders:

    I am pleased to announce that the merger between the publicly held Sloan�s Supermarkets, Inc. and the privately owned entities of the Gristede�s Sloan�s chain was accomplished November 10th, 1997.
    Sloan�s Supermarkets, Inc. had operated 14 supermarkets and a health and beauty aids store while 29 markets were under the ownership of entities controlled by me. We are now one of the largest retail supermarket chains in New York City and the leading markets group in Manhattan.
    Our remodeling program has shown results, which we believe to be quite encouraging. To date, nine stores have been remodeled and modernized and we anticipate that eight more stores will be remodeled before year-end 1998. The program will continue into 1999. We have initiated two new concepts � naming the modernized smaller stores, �Gristede�s 2001� and the larger markets, �Gristede�s Mega Stores.�
    The largest of our remodeled stores is located on Roosevelt Island in New York City and has been expanded in size to 23,000 square feet of selling space from the previous 8,000 square feet.
    Our decision to move forward with these remodeling plans has been proven out by results achieved to date. Sales increases at the remodeled stores have averaged 50%, exceeding our earlier estimates. We are well on the way of becoming a $155 million sales company.
    At these stores we have expanded our deli-bakery operations, highly profitable departments. One of our new store features are on-site banking facilities. Modernization has resulted in a more enjoyable shopping atmosphere with more rapid checkout lines due to scanners and improved lighting facilities.
    We were advised by our auditors that the merger between the public and private companies, for accounting reasons, must be
    treated as a �reverse merger� as a result of the private entities obtaining control of Sloan�s after the merger. The resulting
    combined firm remains a public entity, of course, under the new name of Gristede�s Sloan�s Inc. The accounting treatment results in a
    one-time distortion of the profit and loss statements and balance sheet. The privately held food group shows some expenses unrelated
    to supermarkets operations. These expenses are not being absorbed by the public concern and are solely past overhead expenses.
    Your Board of Directors voted to conclude the year-end on November 30th. The previous year-end of February 28th would have presented distorted financial results. The combined companies first quarter ended on March 1st and we will be reporting sales and earnings on or about April 15th. I might add that legal and auditing expenses connected with the merger are one-time expenses only.
    We are in the 110th year since the founding of Gristede�s with the firm�s name and reputation still standing for �quality�. From one store operated by Charles and Diedrich Gristede we have become a 44-store chain still serving the wealthy carriage trade of 1888 to serving New Yorkers from all walks of life. Gristede�s and New York -- growing together.
    Management is enthusiastic about the future of our Company as our remodeling program continues with the resulting anticipated sales increases. We are relatively insulated from the price wars which frequently occur in the suburban locations where �price-clubs� and warehouse type stores compete with local supermarkets. In Manhattan about 90% of our customers live within a four-block radius from our stores and most of our markets are located in Manhattan.
    Once more, our employees and management appreciate your support and I join them in thanking you for the faith you have shown in our Company.

    Sincerely,
    /s/ J. Catsimatidis


    Sounds shareholder friendly and informative to me. Thank you.

 
GRI
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