Marsh Supermarkets is no backwater grocery chain. A leading retailer in Indianapolis (behind Kroger and Wal-Mart), Marsh operates about 95 supermarkets under the Marsh Supermarkets, O'Malia's Food Markets, and Main Street Markets banners in Indiana and Ohio. About 40% of the stores have pharmacy departments. Its floral business -- Marsh Floral Fashions -- operates floral and gift departments inside Marsh stores. Marsh abandoned self-distribution in 2011 and turned over the supply of all of its stores to C&S Wholesale Grocers. Founded in 1931 by the late Ermal Marsh, the regional supermarket operator is owned by private equity firm Sun Capital Partners.
The Marsh family sold the company to Sun Capital Partners (SCP) for about $325 million in 2006. After restoring the grocery chain to profitability, SCP put it up for sale in late 2009 but took it off the market in 2010 when it failed to attract a buyer.
While the privately-owned Marsh Supermarkets doesn't publish its financial results, the grocery chain rang up an estimated $1.2 billion in fiscal 2012 (ends March) vs. $1.5 billion five years ago.
Marsh has slashed $70 million in overhead, sold about $80 million in real estate, and spun off non-grocery businesses, including a caterer, florist, and convenience store chain. Nevertheless, it's struggling to regain market share lost to its archrival, Kroger, and non-traditional grocery operators, including Wal-Mart and Target. (Marsh's market share is about 16% vs. 27% for Kroger and 33% for Wal-Mart.) Frequent turnover in the executive suite is hindering its efforts. Indeed, Marsh is searching for a new CEO, its third in a little more than a year. Under its last CEO, the company launched a competitive pricing strategy and said it would spend $60 million by 2014 to build as many as 10 new stores and remodel others. Instead, in July 2012 the chain announced it will shutter three locations in central Indiana. On top if its retail challenges, the company is embroiled in a lawsuit and countersuit over the 2006 separation of Marsh Supermarkets from its founding family. The case, which was to go to trial in October 2011, has been postponed. SCP is looking to recover millions of dollars from former CEO Don Marsh, alleging he routinely misused company funds for personal gain. Don Marsh denies most of SCP's allegations and is seeking to recover more than $1.6 million in payments he says are owed to him.
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