MONTVALE, N.J. – A&P, one of the greatest brand names in the history of the United States, is up for auction, along with all the assets of the annoyingly mismanaged and bankrupt Great Atlantic & Pacific Tea Company.
Joan Verdon of The Bergen Record reports on the upcoming sale, where I talk about the company.
Hilco Streambank, a division of the liquidation company that is working with A&P to dispose of its assets, announced on Friday that it is seeking bids for six store names – A&P, Pathmark, Waldbaums, Food Basics, SuperFresh, and Best Cellars – and for eight private label brand names.
Interest in the brands will be telling. The names of great retailers certainly have appeal for re-use, but they often only have niche value as web addresses or for use as store brands. Of course, the important sale to watch is who buys the A&P brand.
The critical brand is the A&P brand in and of itself, and some of its connected store brands like Jane Parker, known for Christmas fruitcakes. The challenge with the sale is that the appeal of the brand was its history, and the words associated with it. The brand story is all about clipper ships, greatness and both oceans, along with tea and coffee. Well, the company is no longer anywhere near the Pacific, it no longer owns Eight O’Clock coffee, and is no longer great. Instead, and through generations of mismanagement and changing times, it became a diminished company that owned a hodgepodge lodge of other struggling, tired grocery store brands like Pathmark, Waldbaums and Super Fresh.
The other grocery retail brands will be a challenge. In one instance, Super Fresh had a number of locations in Richmond, Virginia. One location was a former Pantry Pride, converted to the Super Fresh banner. We called it the “Super Scary” as you never knew what sort of person would be behind the counter. Many of these stores were converted to another annoying brand, Farmer Jack, which had all manner of animated farm characters at the ends of the aisles. As I recall, some would actually make moo-ing sounds. Contrast that with the images from the 1947 produce directory pictured above. There, the company’s focus was on how produce managers can make a produce section look healthy and wholesome.
Back in 2009, students from Prof. Sean Trapani’s class at Savannah College of Art and Design attempted to figure out how how to remake A&P in a class project. Stephen Cyr and Burton Runyan came up with some great, unsolicited ideas, but the direction of the company continued to be directionless. I loved both approaches; the one word that stuck with me that expressed what A&P was was the word “wholesome.”
Thoughts on the Future
Perhaps the best hope for the A&P brand itself is if Hilco offered the uber “Great Atlantic and Pacific Tea Company” brand along with one of the company’s top performing existing retail stores. That retail location would ideally be one of the original store designs with cupola. That way, the brand would still have some originality, and would have an authentic base of operations to rebuild the company. But that store is probably already sold to another operator.
The other issue for Hilco to monitor and offer is the intellectual property related to the brands themselves. That means collateral materials, recipes, formulations and the like. If a brand has these items, it is more valuable. So many consumer brands do not have original formulas and recipes, and over the years the products get changed and the original gets forgotten.
Hilco Streambank will be able to do something with them. They were smart enough to realize and extract value from the Radio Shack brand. A decade ago, many bankruptcy courts would have just tossed that value aside and let the brand die.
The company is also offering store brands like Jane Parker. The challenge is that much of the revenue produced by them came because they were being sold in the company’s stores. The other challenge is that some brands, like Hartford Reserve, only make sense in relationship to A&P, as Hartford was the A&P family name. America’s Choice does have some equity as well, as it has been the quality mid-range brand of A&P and other stores for decades.
The brands being offered by Hilco are:
- Live Better – 2014 Brand Revenue: $30.3 Million
- America’s Choice – 2014 Brand Revenue: $591.5 Million
- Green Way – 2014 Brand Revenue: $52 Million
- Via Roma – 2014 Brand Revenue: $9.6 Million
- Woodson & James – 2014 Brand Revenue: $88.75 Million
- Great Atlantic Seafood Market – 2014 Brand Revenue: $50.4 Million
- Hartford Reserve – 2014 Brand Revenue: $48.6 Million
- Jane Parker – 2014 Brand Revenue: $265,000
Some related links: