Stock mar­ket re­acts pos­i­tively to Sobeys ex­ec­u­tive cuts


Sobeys’ par­ent com­pany saw its stock gain ground on light trad­ing Oct. 11 as in­vestors re­acted pos­i­tively to the Nova Sco­tia-based na­tional gro­cers’ first round of cor­po­rate lay­offs.

Em­pire Com­pany stock was up 41 cents, or 1.88 per cent, to $22.25 at 2 p.m. At­lantic Time from the Oct. 10 clos­ing price of $21.84.

The bump up in the com­pany’s stock came the day af­ter Sobeys an­nounced it was cut­ting 75 ex­ec­u­tive po­si­tions at its of­fices across the coun­try, in­clud­ing 14 in Pic­tou County and three in Dart­mouth.

The much-an­tic­i­pated move is part of re­struc­tur­ing dubbed Project Sun­rise, which is to trim $500 mil­lion in an­nual costs from the Stel­lar­ton-based gro­cer’s books and beef up the bot­tom line. The re­struc­tur­ing plan was an­nounced in early May, and this is only the first of on-go­ing lay­offs ex­pected to con­tinue through to the end of the year.

Staff at Sobeys stores are not to be af­fected by Project Sun­rise, only em­ploy­ees at cor­po­rate of­fices.

“The gro­cery busi­ness is highly com­pet­i­tive and our re­gion­ally­based struc­ture slowed us down,” said Michael Med­line, Sobeys pres­i­dent and chief ex­ec­u­tive of­fi­cer, in a state­ment. “As we move to a na­tional, func­tion­ally-led com­pany we have an ag­gres­sive goal to trans­form our or­ga­ni­za­tion and lever­age our size and scale.

“Change of this mag­ni­tude is not easy on our em­ploy­ees, but we re­main com­mit­ted to mak­ing tough de­ci­sions, and ex­e­cut­ing the nec­es­sary changes, to en­sure our fu­ture suc­cess,” he said.

Em­pire, which trades on the Toronto Stock Ex­change un­der the EMP ticker, has a mar­ket cap­i­tal­iza­tion of al­most $6.04 bil­lion.

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