300 jobs to be lost in B. Green sale Md. wholesale grocer sells division

January 23, 1993|By Michael Dresser | Michael Dresser,Staff Writer Kim Clark of The Sun's Business staff contributed to this article.

B. Green & Co., a 77-year-old wholesale grocer that is one of Maryland's largest private companies, has sold its wholesale division in a deal that will eliminate 300 to 400 mostly high-wage jobs in the Baltimore area.

The buyer is Richmond, Va.-based Richfood Holdings Inc., which said yesterday that it would shift B. Green's wholesale business from its Baltimore-area warehouses to Richfood's 1.2 million-square-foot warehouse outside Richmond.

Richfood said it paid about $55 million for the wholesale division,which served about 250 supermarkets in the mid-Atlantic region and had sales of more than $300 million last year.

John E. Stokely, Richfood's chief financial officer, said his company expected to keep a Baltimore office with about 25 to 35 employees, mostly in sales and advertising. But most of B. Green's nearly 300 unionized drivers, warehousemen and machinists, as well as many office workers, were given notice yesterday that they would be out of work in 60 days.

Yesterday's announcement also took much of the luster off the economic development coup scored by Harford County officials last summer when B. Green announced it would lease 575,000 square feet and build a 125,000-square-foot frozen-food storage facility at the old Channel Home Center warehouse in Perryman.

Jesse Swartz, B. Green's chief financial officer, said the Arbutus company planned to develop the facilities in Perryman but that it would probably employ about 50 people there, rather than the 200 originally expected. Mr. Swartz said B. Green's future operations would mostly be as a warehouse operator.

The announcement also came just six weeks after B. Green said it would sell its military grocery distribution business to Nash Finch Co. of Minneapolis for an undisclosed amount.

At the time, the privately held B. Green said it intended to retain its civilian wholesale division.

The sale to Richfood leaves B. Green with only a sliver of its former distribution business, which amounted to about $525 million last year, Mr. Swartz said.

B. Green would still operate three cash-and-carry wholesale operations, Mr. Swartz explained, two in Baltimore and one in Salisbury, as well as three grocery stores, two in Dover, Del., and one in Salisbury.

Last month, just before the sale of the military grocery division, B. Green was ranked among the nation's 400 largest private companies by Forbes magazine.

Rumors of an impending sale had been swirling around B. Green for weeks, but when the news came down yesterday afternoon, it stunned company workers.

"I'm disappointed," said Willie Holliman, a Teamsters union member and longtime employee of B. Green. "People were looking sad. I never thought B. Green would go out of business. This was a good job."

Bill Hanzlik, a warehouseman who is shop steward for Teamsters Local 570, said about 160 members of his local would lose jobs that paid a top scale of $13.30 an hour. He said about 75 members of Teamsters Local 355, which represents drivers, and about 20 machinists would also be put out of work.

Charles Stansburge, president of Local 570, said the company had been in turmoil for years. He said he noticed a deterioration in the business and heavy personnel turnover during the past 12 months.

Mr. Swartz said the sales of the two divisions were the result of a decision that the company's long-term prospects in the wholesale business didn't look good.

"The reason for the sales is that our industry is consolidating rapidly," Mr. Swartz said, adding that the minimum size needed to compete effectively has increased.

B. Green suffered a serious blow in July 1991 when Shoppers Food Warehouse, a large Washington-area grocery chain, switched its business to Super Rite Corp. in Harrisburg, Pa. Mr. Hanzlik estimated that B. Green lost 35 percent of its business. As part of the agreement yesterday, Richfood entered into long-term supply agreements with B. Green's cash-and-carry and retail grocery operations. In a separate deal, Richfood agreed to supply the 13-store Farm Fresh of Maryland grocery chain, which is part-owned by B. Green.

Richfood Holdings, with $1.07 billion in annual sales, is the largest wholesale food distributor in the mid-Atlantic states.

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