Piggly Wiggly

Summary

Financial Advisor

Charleston, SC

Piggly Wiggly was a leading regional supermarket chain, distributing products to over 75 company-owned stores and 25 independent locations. As an employee-owned, privately operated grocery chain, it employed over 3,000 people and operated more than 70 stores across South Carolina and Georgia.

Carl Marks Advisors (CMA) was engaged to assist Piggly Wiggly Carolina in addressing competitive pressures, profitability challenges, and a leveraged capital structure. CMA facilitated debt reduction through the sale of non-core assets, implemented significant cost reductions, and improved operational efficiency. Key initiatives included optimizing distribution and fleet strategies, enhancing warehouse employee performance, refining inventory management to improve cash flow, and streamlining product offerings by reducing SKUs. These efforts led to improved financial performance and the successful refinancing of the company’s lenders.

Key Challenges

Industry Challenges

Sale of Non-core Assets

Compressed Margins

Out-of-Court Restructuring

Low Liquidity

Engagement Highlights

Reduced debt by $30 million, 50%+, primarily through sale of non-core assets.
Implemented over $22 million in cost reductions to improve income from $14 million loss to positive income.
Reduced costs in Company-owned stores. Specific cost improvement initiatives included:
- Modified distribution and fleet ownership strategy that resulted in reduction of overtime pay.
- Improved utilization and performance of warehouse employees.
- Examined inventory management including safe stock levels and replenishment processes that improved cash flows by reducing working capital over $7 million.
- Identified a number of Gross Margin initiatives including underperforming departments, ineffective discounting/promotional programs and slow moving and obsolete inventory management.
- Reduction of the number of SKUs by 10 percent by eliminating slower moving SKUs.

Piggly Wiggly

Summary

Financial Advisor

Key Challenges

Engagement Highlights

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