Leedmark's parent firm ousts chief Sales appear weak

second store in doubt

February 10, 1993|By Michael Dresser | Michael Dresser,Staff Writer

In a sign that Leedmark's experiment in one-stop shopping might be faltering, the Glen Burnie store's parent company said yesterday that its board has replaced its chairman and is reviewing previously announced plans to open a second "hybrid market."

Didier Leconte, a French citizen who launched the parent company, New Eldis Corp., in 1987 to create an Americanized version of Europe's "hypermarkets," is leaving as chairman "because of a difference of opinion with the board over the strategic direction of the company," said Edward Segal, a spokesman for Leedmark.

Mr. Leconte, who will stay on the board and remain a shareholder of the company, will be replaced by Richard Schroeder, an American citizen who most recently served as general manager of commercial operations for Otis Elevator PLC in London. Mr. Schroeder's resume includes stints at Readers Digest and the Coopers & Lybrand accounting firm, Mr. Segal said, but he has no track record in the retail industry.

Tom Strzelczyk will continue as president of G.B. Glenmark Ltd. Co., the operating company for the Glen Burnie store.

Leedmark, which combines a grocery store and a discount department store under a single roof, opened in May 1991 amid copious publicity about the revolutionary effect it could have on American retailing. Although it is similar to a warehouse store, such as Price Club or Pace, in its pricing, its merchandising is radically different. There is no membership fee, products need not be purchased in bulk and the selection of goods offered in its 130,000 square feet of selling space is much broader.

So far, however, its influence has been confined largely to Glen Burnie and surrounding communities.

Asked whether the change in chairman would affect the company's previously announced plans to open a second store in the Washington-Baltimore area, Mr. Segal said, "That's to be determined." Mr. Segal had previously insisted that the store was doing well, but yesterday he declined to say whether New Eldis was satisfied with sales at Leedmark.

To Jeff Metzger, publisher of the trade journal Food World in Columbia, the move was a clear sign that Mr. Leconte had lost the confidence of the giant Leclerc Group, the French company that effectively controls Leedmark.

"The Leclerc people -- they call the shots," Mr. Metzger said.

Leedmark does not release sales figures, but Mr. Metzger said there are signs of trouble, including light traffic and frequent problems with out-of-stock merchandise.

"I think food's doing OK, but I don't think the rest of the store is making their projected numbers," Mr. Metzger said. He added that Leedmark had been hurt by ineffective marketing, a sour economy and a questionable location for such a concept.

Neil Stern, a retail analyst with the McMillan/Doolittle consulting firm in Chicago, agreed that Leedmark has been a disappointment, but he said it was unlikely that Leclerc would walk away from its investment.

Since Leedmark opened, New Eldis has insistently portrayed itself as an all-American company while playing down its French roots. According to Mr. Stern, the Leclerc Group might have gone too far in covering its tracks out of fear of a xenophobic reaction.

"We were disappointed in the store, because we think they can bring a lot more to the party than they did," Mr. Stern said. "At least if you're going to open a French store, you should have a wonderful bakery."

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