The Andersons Inc. has announced its plans to exit the retail business and close its remaining four retail stores in the second quarter of 2017. The retail closings will have no impact on the company's grain, ethanol, plant nutrient and rail operations.
"The decision to close The Andersons stores was not easy for anyone involved," chief executive officer Pat Bowe said. "Choosing to cease a business that has spanned 65 years and employs about 1,050 people is tremendously difficult."
The closing will eliminate approximately 650 positions in the Toledo, Ohio, area and 400 positions in Columbus, Ohio, approximately 75% of which are part-time positions. The Andersons said it will provide employees with severance packages and outplacement services to assist in career transitioning.
During the past eight years, the Retail Group has incurred pretax losses, including previous asset impairments, in excess of $20 million and closed three stores.
The full financial impact of this closure has not been determined. The company expects to record pretax impairment charges on long-lived assets related to the Retail segment of approximately $6.5 million in the fourth quarter of 2016 as well as a pretax charge in the range of $9-14 million in the first half of 2017 for severance and other costs associated with the closure.
The Andersons also anticipates that the full carrying value of its inventory may not be recoverable during the store liquidation process. Gains or losses are anticipated on individual properties upon sale, but the company is uncertain of the timing and amount of those sales. Subsequent to the impairment charges noted, the Retail Group's assets at their Dec. 31, 2016, carrying values include:
- Inventory and other assets — $21.0 million.
- Long-lived assets — $9.8 million.
The company noted that its original Warehouse Market opened in Maumee, Ohio, in 1952. Its retail stores average 140,000 sq. ft. in size, with an average of 125,000 different SKUs.
The Andersons, founded in Maumee in 1947, is a diversified company rooted in agriculture conducting business across North America in the grain, ethanol, plant nutrient and rail sectors.