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A&P to Close 39 Stores

MONTVALE, N.J. - The Great Atlantic & Pacific Tea Company Inc. (A&P) today announced it will close 39 stores to improve operating results. A majority of the closings will take place before the end of the fiscal year (Feb. 23, 2002).

A&P expects to incur costs and accrue charges in the range of $115 to $125 million after tax, in order to write down fixed assets, close stores, incur restructuring costs, and accrue for future occupancy expenses. Approximately $100 million of the costs will be non-cash or deferred payout.

The company expects to recognize approximately $110 million of these after-tax charges during the third quarter. The remainder of the charges will be recognized in the fourth quarter of fiscal 2001 and the first half of fiscal 2002. In addition to the disposition costs, the company will continue to incur non-accruable operating losses in the underperforming stores until they close. The company said it would provide disclosure regarding the disposition costs and store losses as it reports future results.

Christian Haub, chairman of the board, president and CEO, said, "This action completes an important phase of our turnaround program, and will significantly improve EBITDA and earnings and will reduce debt. After the program is concluded in the middle of fiscal 2002, we estimate the annualized rate of benefit to EBITDA will be approximately $15 million, and the annualized rate of benefit to earnings will be approximately $.35 per share.

"We are pleased that our operating performance continues to improve in the third quarter as the result of the initiatives we have implemented this year, and we expect to generate further improvement through the balance of fiscal 2001," said Haub. "The program we announced today underlines our commitment to take the actions necessary to position our company for breakthrough performance in the months and years ahead."

Founded in 1859, A&P was one of the nation's first supermarket chains, and today is one of North America's 10 largest. As of its latest quarterly report, the company operates 743 stores in 15 states, the District of Columbia and Ontario, Canada under the following trade names: A&P, Waldbaum's, Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Kohl's, Sav-A-Center, Dominion, The Barn Markets, Food Basics and Ultra Food & Drug.
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