Prior to last week, Morgan Stanley Private Equity had never ventured into the grocery business. That all changed when the group agreed to buy the Tops Friendly Markets chain from Royal Ahold.
"Tops has terrific long-term performance, strong employee relationships and a loyal customer base," Gary Matthews, managing director and operating partner for Morgan Stanley Private Equity, told the Rochester Democrat & Chronicle.
"As brand-new owners, we are bullish on the growth prospects," he said. "Our plan is to invest in the business and stores, and grow our operation."
Frank DeRis, president of the United Food and Commercial Workers (UFCW) Local 1, which represents about 10,600 workers, seemed pleased with Morgan Stanley's acquisition of 71 Tops and Martin Super Food Stores stores from Ahold. He told the Democrat & Chronicle, "Our members should be relieved and move on to the future."
Mr. Matthews said that Morgan Stanley was bringing back Frank Curci, a former CEO of the chain, to lead the transition. Mr. Curci is expected to also serve on the new Tops' board.
Bringing in Mr. Curci should help Tops achieve the seamless transition that Mr. Matthews is looking for. One of the steps to bring that about is moving merchandising, information technology and finance from its present location in Carlisle, Pa. to the Buffalo area.
"We want to put those jobs back into the local market," said Mr. Matthews.
Arun Jain, a marketing professor at the University of Buffalo, said relying on current management and those familiar with the upstate New York market should benefit Tops.
"The supermarket industry is very local," Prof. Jain told The Buffalo News. "You really have to have an understanding of the local market."
Discussion Questions: What can be expected of Tops under the ownership of Morgan Stanley Private Equity? Is the company at a disadvantage or advantage because this is Morgan Stanley's first foray into the grocery retailing business? What must Tops do to regain some of the luster it lost under Ahold's ownership?