Huge Leedmark store may close doors soon 2 1/2 -year-old Glen Burnie 'hypermarket' pressed by creditors, starved for cash

October 27, 1993|By Michael Dresser | Michael Dresser,Staff Writer

Leedmark, the mammoth French-owned "hypermarket" that came to Glen Burnie in 1991 amid boasts that it would stock everything from Sonys to baloney, is apparently about to say au revoir.

Cut off from credit by suppliers and threatened with bankruptcy, the sprawling store has been denied further infusions of cash from its French parent company, according to sources in the grocery business.

"I know that they're getting ready to go through a liquidation sale," said Don Bennett, chairman and chief executive of Richmond-based Richfood Holdings Inc., Leedmark's largest grocery supplier.

Mr. Bennett, whose company has required Leedmark to pay for deliveries in cash for "quite some time," said he expects a "major decision" to be made within 72 hours.

Leedmark spokesman Edward Segal declined to give any assurances about Leedmark's long-term prospects. He said Leedmark would have an announcement to make Monday.

Leedmark's creditors might not be willing to wait that long, however.

Bill Harrison, president of Graphtec Inc., said his Baltimore graphic arts company is holding "serious discussions" with Leedmark over unpaid bills and was "not very encouraged by what we were told."

Mr. Harrison said he expects to hold further discussions with Leedmark tomorrow and that he probably would make a decision after that. He said that filing a petition for an involuntary Chapter 7 bankruptcy liquidation is being considered.

When it opened the doors of its building -- the size of an airport terminal -- in May 1991, Leedmark was touted as a revolutionary "one-stop shopping" concept that would combine the best features of a grocery store and a discount department store under one roof.

It didn't take long for the roof to fall in on Leedmark's business, however. In January 1992, shortly after a well-publicized promotion in which it sold 30,000 turkeys for 28 cents a pound, the company announced its first layoffs. That August, a new Wal-Mart store opened in Glen Burnie, intensifying the already cutthroat retail competition in northern Anne Arundel County.

As the local economy steadily declined, Leedmark officials backed off from their early talk of opening 20 or more stores in the mid-Atlantic region.

In November 1992, the company announced plans to build a second store in the Baltimore-Washington area. But three months later, the board of Leedmark's parent, New Eldis Corp., ousted the store's expansion-minded French chairman, Didier Leconte, and canceled plans for a second store.

Mr. Leconte, reached yesterday at his home in Bethesda, said that shortly after that the French owner of New Eldis, the giant Leclerc Group, cut off the flow of funds that subsidized %o Leedmark's operations.

The Leclerc Group replaced Mr. Leconte with Richard Schroeder, an executive with no retail experience who was widely viewed as a caretaker.

Mr. Leconte said the decision to stick with one store hurt Leedmark because it could never achieve the buying power and the marketing leverage it needed.

But many outside retail experts were never impressed with the basic idea behind the store. They expressed doubts that Americans wanted to throw clothing and stereos into the same grocery cart with their meat and produce.

Industry executives generally credited Leedmark with running a good grocery operation. Mr. Bennett said "they did a tremendous food business," and the regional grocery trade paper Food World estimated Leedmark's first-year sales of typical grocery store products at $58.6 million, making it the No. 1 individual grocery store in the Baltimore area.

The problems apparently were on the nongrocery side. The aisles were jammed on Saturdays and Sundays with families doing their grocery shopping, but the store was seldom busy on weekday nights.

Leedmark insisted on the term "hybrid market," though few others could discern any difference between that and a "hypermarket" -- a European idea that has been a conspicuous failure in the United States.

As recently as September, Carrefour Supermarche SaSA, another large French retailer, pulled the plug on two money-losing hypermarkets in Philadelphia.

Even before Leedmark opened, the store was dogged by the poor image of Carrefour's stores. Its parent company reacted by vigorously denying its French heritage and trying to bolster its all-American credentials with a red, white and blue store design.

It didn't work. More than a year ago, Kenneth M. Gassman Jr., a retail analyst with Davenport & Co. in Richmond, Va., gave his opinion of the reason:

"There's something about hypermarkets that American consumers don't like."

HYPERMARKET FAILS (APPEARED IN THE CARROLL EDITION ONLY)

Leedmark, a giant combination of grocer and discount retailer, was intended to be the first of many stores when it opened in 1991. But it has not turned out that way.

The store's goal was to dazzle consumers with a "one-stop shopping" concept, but many shoppers apparently went for groceries and not much else. The French owners cut off its money supply this year, and Leedmark's credit suffered.

An announcement about Leedmark's future is expected Monday.

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