Weird. I was on the phone with a reliable tipster suggesting more bad financial news could lie ahead for Affiliated Foods Southwest when a brief news release arrived from the executive offices of the grocery wholesaler based in Southwest Little Rock.
It said Affiliated was making progress in restructuring finances and struggling with liquidity on account of corporate supermarkets that the co-op is attempting to sell. The news release also said it is discussing sale or merger with other unnamed wholesalers.
I called for elaboration, but so far my call hasn't been returned. A spokesman in the executive office said the e-mail originated from an assistant in the office of Al Miller, an executive vice president who came out of retirement to help the company recently. The full news release is on the jump. It contains some typos.
Affiliated Foods Southwest
Little Rock, Arkansas
April 29, 2009
In a news editorial dated March 14, 2009 a spokesman for Affiliated Foods Southwest outlined the company’s plans for reorganization following some cash flow difficulties. Over the past six weeks Affiliated Management along with the Board of Directors of the company has made great strides in completing this process. The results of which has streamlined the company producing more efficiencies and cost savings initiatives.
One of the main causes in the affiliated liquidity issue was having capital tied up in cooperate supermarkets being sold off. Affiliated has intensified its efforts to move forward with the sale of the remaining supermarkets. Additionally the company is perusing alternant recommendations presented by its consulting company, The Keystone Company, which includes the sale or merger of the wholesale cooperative. Pursuant to this recommendation Affiliated is in the process of evaluating several proposals made by other wholesale food distributors. “We are under confidentiality agreements at the moment with those companies we are negotiating with and cannot disclose their identity,” stated David Hendrix, the Chairman of the Board for Affiliated Foods Southwest. “We believe this process should be complete by next week, with a decision being made public at that time.