A Michigan company whose operations stretch into Canada is taking the opportunity to expand into the state.
By MARK ALBRIGHT
Published June 12, 2003
Smart & Final Inc., which operates something of a convenience store chain for restaurants, caterers and bargain hunters who buy food in bulk, is pulling out of Florida.
The food service company based in City of Commerce, Calif., is selling its 14 stores and its Henry Lee Co., a food delivery business based in Miami, to Gordon Food Service Inc. of Grand Rapids, Mich. The sale includes all three Smart & Final stores in Pinellas County.
Terms are still being negotiated. But the sale would extend the reach of 106-year-old Gordon, the nation's largest privately held food service company, into Florida for the first time.
Gordon operates a delivery business as well as 93 stores in the Midwest that stock 3,000 items. Like Smart & Final, which operates 223 stores mostly in the West, Gordon positions itself between supermarkets and warehouse clubs. Neither requires that consumers buy a membership to buy groceries in restaurant-size containers.
Gordon officials could not be reached for comment so it remains unclear what the company plans for the Tampa Bay area. Smart & Final store managers referred all questions to their corporate headquarters.
Gordon already serves 12 states and Canada, but its reach currently ends in north Georgia.
Most of Smart & Final's stores and its Henry Lee business are centered in South Florida. The company generates four times more in sales from its stores as it does from delivering food to restaurants, day-care centers and other institutional food services.
The industry has been unsettled since the Dutch retailer Royal Ahold stumbled badly after a financial reporting scandal erupted at its U.S. Foodservice unit, the second-biggest institutional food supplier in the country.
Smart & Final, which is controlled by French retailer Casino Guichard-Perrachon SA, has been in business in California for 131 years. It has had a tough time cracking the Florida market, however. The company's initial foray into Florida in 1996 was stalled, and a handful of stores closed a few years later.
Ross Roeder, Smart & Final's chief executive, lives in St. Petersburg. He tried to fix the hobbled Florida operation by acquiring an established Miami food distributor and developing a presence that peaked at 11 stores in South Florida.
Smart & Final reported revenues of $462-million in the first quarter that ended March 23, up from $445-million in the year-ago quarter. But net income slumped to $163,000, or 1 cent a share, down from $587,000, or 2 cents a share. The company blamed higher operating expenses.
