By Kimberley Donoghue PBN Web Editor Twitter: @kydonoghue
PROVIDENCE – United Natural Foods Inc., distributor of natural, organic and specialty foods and nonfood products in the United States and Canada, announced Friday it is divesting its nonfoods and general-merchandise divisions.
UNFI said it signed an asset-purchase agreement with L&R Distributors Inc. but did not disclose the financial terms of the agreement.
UNFI entered the nonfoods and general-merchandise business - cosmetics, seasonal products, health and beauty products, and hard goods – after acquiring Millbrook Distribution Services Inc. in November 2007.
The transaction is expected to close sometime in UNFI’s first quarter for fiscal 2012, which ends Oct. 29, 2012. As a result of the sale, UNFI’s facility in Harrison, Ark., will close and an unspecified number of employee will be laid off.
UNFI estimates related restructuring and impairment charges of $11 million to $12.5 million during the fourth quarter of fiscal 2011 –about $8.4 million to $9.6 million - and first quarter of fiscal 2012. The charges will include severance and related benefit costs, as well as charges to transition the food line from the Harrison facility to other UNFI facilities.
“After thorough analysis, we came to the conclusion that general merchandise and nonfood products are not strategic to our business,” said Steven Spinner, president and CEO of UNFI. “By selling these noncore product lines and partnering with L&R Distributors to ensure a smooth transition for these customers, we will be positioned to completely focus our efforts on growing and expanding our natural, organic and specialty lines of business, while continuing to provide the highest level of service to our customers.”
UNFI revised down its fiscal 2011 guidance to $1.55 to $1.59 per diluted share, from $1.67 to $1.69 per diluted share as announced June 2.
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