Manos ending his 39-year Giant career Izzy Cohen's hand-picked successor held 3 top posts

2-year profit slump

Chain's acquisition by Royal Ahold being completed today

October 28, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Giant Food Inc. Chairman Pete L. Manos -- who was personally selected by company co-founder Israel "Izzy" Cohen as his successor -- announced his retirement yesterday, a day before Royal Ahold NV completes its acquisition of the Landover-based food chain.

Manos, 61, has worked for Giant for 39 years. He became president in 1992 and chief executive officer in 1995, and since 1996 has been chairman, CEO and president.

Manos has guided the company to the top market share, or 29 percent, of the $3.84 billion Baltimore metropolitan grocery market. He also expanded Giant's reach north to Delaware and Pennsylvania.

He also presided over construction of the first Giant in Baltimore City in 22 years. The new store -- a $6 million, 46,445-square-foot project at 4624 Edmondson Ave. -- is to open Nov. 8.

On the flip side, Giant has been in a two-year profit slump that started with a crippling Teamsters strike in 1996.

"When Izzy Cohen was ill in 1994-1995, he charged me with preparing this company to move it into the 21st century," Manos said yesterday. "I think I've accomplished that with the sale of Giant to Ahold.

"After going through the strike and our labor problems, I think it's time to bring in somebody who may be a little bit younger. I wasn't edged out. I edged myself out."

Manos' retirement will take effect Jan. 2. In the meantime, he will work with Bob Tobin, president and chief executive of Ahold USA, to find a replacement. The two are considering Giant and Ahold officials, as well as candidates from outside the companies, Tobin said.

"I'm not surprised that Pete would leave at some point, but I am surprised that it happened this quickly," said Jeff Metzger, publisher of Food World, a trade monthly based in Columbia. "Ahold typically wants the managers of the acquired companies to continue to manage."

Manos has left a strong legacy, Metzger said. "He's done very well. Giant is well-run, profitable and enjoys a commanding local market share," he said.

Kenneth M. Gassman, who follows Giant for Davenport & Co., a Richmond, Va., investment firm, said Ahold will gradually bring in more of its management team because "Giant has hit a brick wall" in terms of market share gains beyond the local area.

"I don't know if they fired Pete, but it's no surprise that Ahold would choose to replace him," he said.

Royal Ahold, the international food retailer based in the Netherlands, received Federal Trade Commission staff approval last week of agreements to divest 10 supermarkets, which would pave the way for the $2.7 billion cash acquisition.

The Dutch company also completed its tender offer of 98.8 JTC percent of outstanding shares at $43.50 per share.

Among the recipients of Ahold cash will be Manos, who stands to get $6.8 million, according to regulatory filings.

But his biggest fault may have been not being Izzy Cohen, Giant's chairman, co-founder and controlling shareholder. Cohen designated Manos as his successor in 1992, and died in late 1995.

"There's an old saying, and it goes, 'Never follow a legend,' " Gassman said. "Izzy Cohen was a legend. I don't care how good his replacement is, it's extremely tough to capture the charisma Izzy Cohen had.

"I think it was tough for Pete. It's not that he was ineffective; he was just put in an awkward position. Izzy had the reputation that whatever he touched turned to gold. Pete held things together, but he wasn't able to make headway."

Before being appointed president, Manos had served as the company's senior vice president for food operations since 1985. He joined Giant in 1960 as an accounting clerk and has been responsible for Giant's store operations.

Pub Date: 10/28/98

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