Tops Friendly Markets

TOPS Markets, LLC

Type	Subsidiary of Morgan Stanley Private Equity
Industry	Retail (Grocery)
Founded	1962
Headquarters	Williamsville, New York
Number of locations	Approximately 131 Stores (Including 5 Franchise Locations & former Penn Traffic stores)
Key people	Frank Curci, CEO
Products	Bakery, dairy, deli, frozen foods, general grocery, meat, pharmacy, produce, seafood, snacks, liquor
Revenue	$2.00 billion USD (2010)
Employees	15,800 (2010)
Website	www.topsmarkets.com

Tops Friendly Markets is an American supermarket chain based in Williamsville, New York, with stores in the western and central regions of that state and in northern Pennsylvania

History

Early years

Tops Friendly Markets was co-founded by Armand Castellani, who was born in 1917 in a village outside of Rome, Italy. His family came to the United States in 1920, and eventually settled in Niagara Falls, where his father, Ferrante, opened a small neighborhood grocery store.

Following his mother's death in 1933, Castellani left school to help manage the store. He continued to do so until joining the Army in 1941. He attained the rank of captain after five years' service.

After World War II, Castellani returned to the family business. In 1951, he set out on his own and opened the Great Bear Market in Niagara Falls. Shortly thereafter, he partnered with Thomas Buscaglia, owner of a grocery equipment firm, T.A. Buscaglia Equipment Co. Throughout the 1950s, Buscaglia, as CEO, and Castellani worked together, entering into a cooperative agreement with other small stores to build the foundation of what was to become the Tops Friendly Markets chain.

As the local economy boomed in the mid-to-late 1950s, the company's operations expanded to include building construction principally devoted to supermarkets. During this time, Savino Nanula, a meat department manager, became an integral part of the company's management team.

By 1958, they had set up headquarters in Buffalo, and in 1960 opened their first modern supermarket: a 25,000 square foot (2,250 m²) store on Portage Road in Niagara Falls. The company then changed its name to Niagara Frontier Services (NFS).

1960s

In 1962, franchise systems were established for supermarkets, under the Tops Friendly Markets name, and for smaller stores as B-Kwik. In February of that year, Tops signs went up on seven stores, and the chain was born. By the end of the year, NFS was composed of 15 franchised stores throughout Western New York, employing a total of 300 associates. Throughout the 1960s, NFS implemented warehousing and centralized purchasing to allow the company to grow efficiently.

In 1967, Buscaglia died and Armand Castellani took over as chief executive officer.

The next year, NFS went public, trading on the American Stock Exchange. Subsequently, the company began construction on a perishable warehouse and acquired general merchandise distributor G&G Sales and Service.

The following year, 1969, NFS entered the convenience store market by opening the first Wilson Farms Neighborhood Food store in Tonawanda, New York.^{[disambiguation needed ]} The same year, Tops Friendly Markets was named Retailer of the Year by the Brand Names Foundation, an honor it would again earn in 1974.

1970s-80s

The 1970s saw Tops Friendly Markets, under the leadership of Castellani and Nanula, continue to grow in Western New York, and thrive where competitors struggled. Early in the decade, Tops began to build more company-owned stores. By the mid-70s, the company had expanded into the Rochester area, and over time, it became the only real competitor to Wegmans in the region. Also during this time, Tops Friendly Markets opened its first Pennsylvania store in Bradford.

In 1983, SB Investors, a private, New York-based investment group, purchased NFS. By this time, operations had grown to include 65 Tops stores, 50 Wilson Farms stores and 15 B-Kwik Food Stores, employing 7,000 associates.

The next year, Tops Friendly Markets introduced Western New York shoppers to direct debit service, Instabank ATMs and the first CarryOut Café. It was also the year that Tops won the first of eight Golden Penguin Award from the National Frozen Food Association.

In 1985, Castellani was named Chairman of the Board and Nanula succeeded him as CEO. The following spring, SB Investors became known as Tops Friendly Markets, Inc., as the company went public for the second time, this time on NASDAQ. The following year, as Tops Friendly Markets celebrated its 25th anniversary, a $196 million leveraged buyout of the company was engineered between a group of Tops Friendly Markets executives and private equity firm Riordan, Freeman & Spogli. In 1987, Tops installed electronic scanners, one of the last supermarkets to do so.

1990s

A new era began March 27, 1991 as Tops Friendly Markets, which had grown to 145 total stores and 11,000 associates, was acquired by Ahold, a major international food retailer based in the Netherlands. The same year, the first Tops Friendly Markets International Super Center opened in Amherst. At that time, the 112,000 square foot (10,080 m²) store was the largest in Western New York, and boasted the biggest in-store bakery in the entire U.S.

In the next few years additional Tops Friendly Markets International stores opened in Niagara Falls, West Seneca, Greece, Perinton, and Ithaca, NY. Also, an International store was opened in Lockport, NY, but does not carry the International name. This is because it is a franchised location. The International stores feature additional floor space and a product mix of many foods from different world cultures which up until then had not been widely available in the Buffalo area. With many Canadians at the time regularly crossing the border due to relaxed duties after the recently-concluded Canada-United States Free Trade Agreement and the Canadian dollar at 90% of the value to its American counterpart, the new stores were in the right place at the right time and did even better business than expected.

The 1990s were marked by a new growth in operations, including the 1996 merger with Finast in Northeast Ohio, expansion across New York, the construction of a new headquarters in Williamsville, NY and the opening of an 848,000 square foot (76,320 m²) distribution center in Lancaster. By 1998, Tops Friendly Market's market area stretched from Sandusky, Ohio, to Utica. In January 1999, the BonusCard, its customer loyalty program, debuted. In May, all 45 Northeast Ohio Finast stores adopted the Tops Friendly Markets banner.

Tops Friendly Markets entered into the new millennium by acquiring the Sugarcreek Stores chain, adding 87 stores to its Wilson Farms division. That summer, Tops installed self-scanning checkouts at 11 stores in Ohio and in late August, the first Tops fueling station premiered in Akron.

In 2001, Tops acquired 22 former Grand Union stores in the Adirondack region and in Central New York, further east than its market had traditionally been. They also introduced the Tops Xpress convenience store format. By the end of the year, the company celebrated another landmark with the opening of its 150th Tops store, located in Madison, Ohio.

2000s

This aggressive growth was fueled in part by deliberate understatements of Ahold's debt to the financial markets. When this came to light in 2003, Tops was forced to backtrack. By 2005 the convenience stores had been sold to WFI Acquisition Inc., which continues to operate the stores under their former names, and Tops Friendly Markets was also looking to sell the 31 stores it had established in the Adirondack region. P&C Foods acquired 2, Price Chopper acquired six, Hannaford acquired three, and twelve returned to the Grand Union division of C&S Wholesale Grocers.

Martin's Super Food Stores

In 2004, Tops Friendly Markets fully remodeled a store in Perinton, and rebranded it Martin's Super Food Store^[1] in an effort to revitalize the marketplace. Martin's is a brand owned by Tops Friendly Market'- then-parent company, Ahold, via their subsidiary Giant-Carlisle. The stores were designed in a colorful manner in order to attract both new and old customers. The format worked well for the company, which prompted them to remodel another location in the Buffalo suburb of Amherst into the Martin's Super Food Store format, and then later three other stores in Dunkirk-Fredonia, Derby, and Batavia. As of April 16, 2006, the Martin's Super Food Store in Amherst reverted back to a Tops Market due to customer feedback, and the company announced it would no longer pursue the Martin's brand in New York.

As of February 28, 2008, the remaining Martin's locations were all returned to the Tops Friendly Markets brand as part of the sale to Morgan Stanley Private Equity. The decision was made to operate the company under one banner going forward.^[2]

Store Closings

Store closing in Tallmadge, Ohio, which later became an Acme Fresh Market store

On July 6, 2006, Ahold announced its decision to exit the Northeast Ohio market, which consisted of 46 locations. The 46 stores were located in Greater Cleveland, Akron, Youngstown and Norwalk and at the time employed approximately 3,800 full and part-time employees. Tops announced on October 10, 2006 that 18 of its Ohio stores were sold to rival Giant Eagle. An additional store in Sheffield, Ohio was reportedly sold on November 29, 2006.^[3] The store in Tallmadge, Ohio was sold to local competitor Acme Fresh Market. On November 9 in a company press release, it was stated that all Tops stores in Northeast Ohio will close whether they have been sold or not. A store in Cleveland's Lee-Harvard Neighborhood and a store in Garfield Heights were converted to Dave's Markets, a small independently owned chain of grocery stores in Cleveland. In June, the Tops store in Cleveland Heights became a Dave's.^[4] All Northeast Ohio stores closed by 3 pm on December 8, 2006 and some remain unoccupied.^[5]

Sale

Ahold announced on November 6, 2006 that the remaining 72 stores in the Tops chain, in New York and Pennsylvania, would be sold. Although they have been profitable, it is a strategic decision for Ahold to focus on other chains such as Giant and Stop & Shop.^[6]

On November 7, 2006, it was reported that Price Chopper may buy the chain. It had previously bought six former locations.^[7]

On May 25, 2007, well-known grocery industry consultant Burt P. Flickinger III announced that he is part of a group of investors interested in purchasing the Tops Markets chain. Flickinger's family co-financed the first 60 Tops Friendly Markets stores that opened, and stated that he hopes to restore the local focus that Tops was originally known for.^[8]

On June 1, 2007, it was reported that Tops Friendly Markets agreed to repurchase its Lancaster warehouse from C&S Wholesale Grocers, Inc. C&S will continue to operate and manage the warehouse. Max Henderson, Executive Vice President and General Manager of Tops Markets, stated that he hoped repurchasing the warehouse would make Tops more attractive to a potential buyer.^[9]

On October 11, 2007, Ahold announced the sale of Tops Friendly Markets, LLC to Morgan Stanley Private Equity in a transaction valued at $310 million. Morgan Stanley agreed to purchase 71 of the 72 stores in the chain.^[10][11] The Baytowne Plaza store in Penfield, New York, known to Tops associates as the "Webster store", was not part of the transaction. The owners of the Baytowne Plaza notified all of their tenants that they would not be allowed to renew their lease upon expiration, and Tops Markets closed the doors of their store to the public on October 27, 2007.^[12]

Morgan Stanley

At 12:01 am on December 2, 2007, Morgan Stanley Private Equity became the new owner of Tops Markets. Ahold's subsidiary Giant Food of Carlisle provided operational and support services for up to one year after the sale. Max Henderson, Executive Vice President of Tops, resigned his position from the company, and Frank Curci, a former Tops Friendly Markets CEO, returned as CEO of the company.

Tops Friendly Markets plans to bring back approximately 100 corporate positions in marketing, merchandising and finance to Buffalo, NY. Recently, those positions have been run out of Carlisle, PA by Giant Food. Existing stores will resume upgrades and remodeling, and plans for new stores are in the works as well, including the addition of Tim Hortons full-service restaurant or a self-serve kiosk as well as Anchor Bar wings.^[13] A growth rate of more than 10% is expected over the next four to five years.^[14]

In 2009, it was announced that the chain would open a new store in Spencerport, NY.^[15] This is the first time since the Morgan Stanley acquisition that the chain has opened a new store. It opened on August 18, 2010.^[16]

Penn Traffic

Tops was confirmed as the high bidder of Penn Traffic and on January 25, 2010 a federal judge signed off on an agreement in US Bankruptcy Court for the sale of same. The purchase will stretch the company's footprint from Pennsylvania to New Hampshire.^[17] The Penn Traffic deal was for 79 stores, but Tops is^[18] closing four stores within two months, in addition to one in Ogdensburg, NY. In March 2010, it was announced that an additional five stores, including one in Ithaca, New York, would close. Five in Pennsylvania were sold to Giant Eagle^[19] The Tops name will be placed on remaining stores within the next year. In August 2010, Tops was ordered by the Federal Trade Commission to sell seven stores it had acquired from Penn Traffic due to anticompetitive concerns.^[20]

Advertising and Logo

Its longtime ad slogan (first used in the late 1980s) is "Tops Never Stops ... Saving You More!" The slogan, temporarily put on hiatus in 2001, was brought back and refreshed in 2006, as "Tops Never Stops ... Giving You More!". In 2010 the company again changed the slogan to "Your Neighborhood Store, with More". The company logo was originally a spinning top, and is still reflected in the diamond design used today.

References

1. ^ Location and Photo on Wikimapia
2. ^ http://www.13wham.com/news/local/story.aspx?content_id=3858a0db-bee4-4e60-97ab-3a39add2fb7d&rss=102
3. ^ The Morning Journal - Apple's to buy Tops store
4. ^ Company Press Releases
5. ^ Story not found - Cleveland.com
6. ^ Microsoft Word - 061106e Retail Review.doc
7. ^ "Tops sale may be opportunity for Price Chopper". November 6, 2006. http://www.bizjournals.com/albany/stories/2006/11/06/daily10.html?jst=s_cn_hl. 
8. ^ . http://money.cnn.com/news/newsfeeds/articles/newstex/VNU-0035-17017010.htm. ^{[dead link]}
9. ^ "Tops buys back warehouse operation - Business First of Buffalo:". http://washington.bizjournals.com/buffalo/stories/2007/05/28/daily34.html. ^{[dead link]}
10. ^ Morgan Stanley - Press Release
11. ^ Glynn, Matt (October 12, 2007). "Tops to get new owners, local control". The Buffalo News. Archived from the original on 2007-10-20. http://web.archive.org/web/20071020053940/http://www.buffalonews.com/home/story/182462.html?imw=Y. Retrieved 2007-10-12. 
12. ^ http://www.13wham.com/news/local/story.aspx?content_id=f73aa52a-4077-4cb5-9f56-e45b3c9de85f&rss=102
13. ^ . http://findarticles.com/p/articles/mi_m4PRN/is_2008_Oct_7/ai_n29482343. ^{[dead link]}
14. ^ http://www.buffalonews.com/home/story/221084.html
15. ^ http://rocnow.com/article/business/2009911190333
16. ^ http://www.topsmarkets.com/shareddev/sharedcontent/SP/0815_spencerport/index.html
17. ^ http://www.syracuse.com/news/index.ssf/2010/01/judge_approves_sale_of_penn_tr.html
18. ^ http://www.topsmarkets.com/shareddev/tops_press/company_press_archive.cfm
19. ^ http://www.topsmarkets.com/shareddev/tops_press/company_press_article.cfm?press_id=402
20. ^ Tops Must Sell 7 Stores: FTC

External links

• Company website