Market Basket: On the brink again
The Demoulas board of directors met Monday but offered no indication on whether the feuding sides of the Demoulas family had struck a deal that would bring back workers and customers to 71 Market Baskets around New England.
The board meeting came a day after New Hampshire Gov. Maggie Hassan and Massachusetts Gov. Deval Patrick “met at length with the principal parties from Market Basket” Sunday night, Hassan’s press secretary, William Hinkle, said Monday.
“This is a private business dispute, but the governor is hopeful that the leaders at Market Basket will come together and reach a constructive resolution that keeps their workers employed and reduces the impact on consumers and other affected businesses,” Hinkle said in a statement.
Patrick’s press secretary, Heather Nichols, said in a separate statement: “The parties have made real progress on the terms of the sale and operating control of the company, and the governors are encouraged that a resolution may be within reach.”
Peter Gulezian, store director at the Market Basket in Manchester, was not optimistic that ousted CEO Arthur T. Demoulas would be able to strike a deal with his cousin, Arthur S. Demoulas, to buy a controlling stake in the company.
“Unfortunately, I’ve lost faith in what I read and hear about and think it’s going to continue until our poor company crumbles to nothing,” Gulezian said.
A deal “never should have taken that long,” he said.
“There should not be that many i’s to dot and t’s to cross,” he said. “It seems the longer it goes on, the worse everything appears to be.”
As many as 8,000 people had worked part-time at one of about 30 Market Basket stores in New Hampshire. But most lost all their scheduled hours recently after management ordered store directors to better balance payroll with drastically reduced store sales.
Many New Hampshire store directors report their business was down between 87 and 98 percent.
The company’s co-CEOs have ordered employees to return to their jobs or risk being replaced.
The family conflict has created ripples in the regional economy, including harming food suppliers.
Tom Malley, CEO of Boston Sword & Tuna in Boston, said he ended his relationship with the current Market Basket management.
Market Basket promised to make up for some of his lost sales and later notified him to expect a new order for fish. The seafood business received checks that overpaid the business by $83,000 and $415,000.
“We were dumbfounded,” he wrote in an email. “In my mind there could be only two answers to these accumulating mistakes and self-destructive strategies. One was that the CEOs were in way over their heads. How many mistakes like this were being made? How would the shareholders from either side of the feuding family feel knowing that mistakes of this magnitude were being made?
“The only other explanation seemed to be a deliberate attempt to sabotage the future of the company. Every pundit with a knowledge of business has stated that the only viable buyer is Arthur T. Could the Arthur S. side of the family be so embittered by the defiance of Arthur T. and all the stakeholders supporting him that their plan is to sell him — at full pre-conflict price — a pile of smoking rubble?” Malley said.
A Market Basket spokesman issued a statement that addressed issues related to vendors.“When a distribution network set up over decades is shut down in one day it is naïve to assume any company would not suffer. The longtime employees that ran Market Basket’s buying and distribution system walked out on their jobs, their customers and their vendors on July 18,” the statement said. “That is precisely the reason Market Basket’s stores have had only limited perishable items in stock since. We do understand the problems that the shutdown of the distribution system has caused Market Basket’s vendors who are caught in the middle of this situation. We have been diligently working with vendors to limit the damage the walkout has caused.”