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SHEBOYGAN, WI-Fresh Brands Inc., operator of the corporate-owned and franchised Piggly Wiggly and Dick’s Supermarkets brands, reported a net income of $195,000, or 4 cents per diluted share for the second quarter of 2005, compared to a net loss of $2.2 million, or 44 cents per diluted share, for the second quarter of 2004. The company said net loss for 2004 were due to operating losses and the loss on disposal of several corporate stores that were closed or sold in 2004.

Net sales for the second quarter ended July 16 of $164.2 million compared to $163.2 million for the second quarter of 2004. Corporate retail store sales decreased $5.4 million, or 7.7%, during the first quarter of 2005 compared to the same period of 2004. The company’s comparable store increases were 1.6% for the quarter, while franchise retail sales increased 4.2% and consolidated franchised stores were unchanged.

During the company’s second quarter earnings call Friday, the company attributed its corporate and franchised Piggly Wiggly store-sales increases to its value proposition strategy and improved weekly promotions. Adversely, sales in nine of the company’s corporate Dick’s Supermarkets stores were flat for the quarter, as the company did not implement its value proposition strategy throughout those stores.

Also during its Q2, the company facilitated the closure of two underperforming franchise stores. In connection with the closures, Fresh recognized $1 million in repositioning charges related to the vacated leases. Louis Stinebaugh, Fresh Brands’ president and chief operating officer, said the benefits of the closures are “beginning to be realized” as the company reports improved operating performance in its corporate and consolidated franchise retail segments.

Stinebaugh says the company is currently reviewing additional underperforming stores, and “will determine appropriate actions to be taken for those locations that are not meeting our performance expectations.” Fresh Brands currently has 75 franchised supermarkets, 20 corporate-owned supermarkets and two corporate-owned convenience stores.

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