Duane Reade strategic turnaround plan underway; on track to meet previous EBITDA guidance

By Jennifer Lanning Drey

Portland, Ore., Jan. 22 - Duane Reade, Inc. is implementing a strategic turnaround plan that includes optimizing working capital, improving operating efficiencies and cost structure, and creating front-end margin improvements, the company said in an investor presentation given Tuesday.

The plan further targets driving growth in front-end and pharmacy sales, reducing litigation costs, and addressing underperforming stores.

Duane Reade detailed the plan in slides presented at the JPMorgan Global High Yield and Leveraged Finance Conference in Miami.

Under the plan, Duane Reade is taking steps including introducing higher-margin products, offering new products and services, and streamlining its workflow.

The company has not yet reported its full-year 2007 EBITDA but is on track to meet its previously announced adjusted FIFO EBITDA guidance of $76 million to $80 million, Duane Reade said Tuesday.

The company reported cash of $1.4 million at Sept. 29, unchanged from the same date in 2006. Revolver availability was $61.2 million at the end of the third quarter, and total debt stood at $566.1 million and included $195.0 million of 9¾% senior subordinated notes due 2011, according to Tuesday's presentation slides.

The company primarily operates in New York, which still shows signs of being a strong economic climate but is difficult to penetrate due to factors including space configurations and high real estate costs, the company said.

Duane Reade is a New York-based drugstore chain.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.