Price Co. Will Shut Operation and Fire 395
Price Co., operator of 40 Price Club membership discount warehouses, said Tuesday that it is discontinuing the food distribution operation of its newly acquired Alfred M. Lewis Inc. unit effective Dec. 9, a move that will cost 395 employees their jobs.
Of those being laid off, 275 are based at two Lewis distribution warehouses in Riverside and 120 are at a warehouse in Phoenix, according to Price Co. Executive Vice President Giles Bateman. Employees were informed of the pending layoffs in a letter from Bateman on Tuesday morning.
Price acquired Riverside-based Alfred M. Lewis Inc. in October for $48.1 million in cash. The deal also included Lewis’ food service operation, which will remain open for the time being, and a 35-outlet cash-and-carry retail operation that Price has sold to a buyer who is leasing the sites back from Price.
At the time of the acquisition, Price said it was interested in buying Lewis mainly to acquire its real estate and that it was aware of “serious financial problems” at Lewis. After the acquisition, Price kept the food distribution unit open while it took a “closer look” at its financial situation.
“After further study, the Price Co. concluded there was not a reasonable possibility of reversing the losses and this business could not continue to operate,” Bateman said. He described the decision as “painful, but necessary because of continued unprofitability.”
Price also said it “hopes severance arrangements (for employees) . . . can be structured to carry all employees through Christmas.”
Bateman said Price plans to convert Lewis’ Northridge food distribution center into a Price Club store at some future date and that Lewis’ 120,000-square-foot warehouse in National City has already been converted into a meat and photo processing center for Price Club products.
Lewis warehouses in Las Vegas, Phoenix and Riverside “will be disposed of,” Bateman said, as will a fleet of trucks operated by the Lewis food distribution business.
