SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 28, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-15023
FRED MEYER, INC.
(Exact name of registrant as specified in its charter)
Delaware 93-0798201
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3800 SE 22nd Avenue
Portland, Oregon 97202
(Address of principal executive offices) (Zip Code)
(503) 232-8844
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange on
Title of Class which registered
-------------- -----------------------
Common Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X
No ___ ---
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statement incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ___
Aggregate market value of Common Stock held by nonaffiliates of the
Registrant at March 1, 1995: $526,316,280
Number of shares of Common Stock outstanding at March 1, 1995:
26,586,440
Documents Incorporated by Reference
------------------------------------
Part of Form 10-K into
Document which incorporated
- -------- ----------------------
Portions of 1994 Annual Report Parts II and IV
to Shareholders
Portions of Proxy Statement for Part III
1995 Annual Meeting of Shareholders
TABLE OF CONTENTS
------------------
Item of Form 10-K Page
- ----------------- ----
PART I
Item 1 - Business . . . . . . . . . . . . . . . . . . . . . . 1
Item 2 - Properties . . . . . . . . . . . . . . . . . . . . . 9
Item 3 - Legal Proceedings. . . . . . . . . . . . . . . . . . 10
Item 4 - Submission of Matters to a
Vote of Security Holders . . . . . . . . . . . . . . 10
Item 4(a) - Executive Officers of
the Registrant . . . . . . . . . . . . . . . . . . . 11
PART II
Item 5 - Market for the Registrant's Common Stock
and Related Stockholder Matters. . . . . . . . . . . 12
Item 6 - Selected Financial Data. . . . . . . . . . . . . . . 13
Item 7 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations. . . . . . . . . . . . . . . . . . . . 13
Item 8 - Financial Statements and Supplementary Data. . . . . 13
Item 9 - Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . . . 13
PART III
Item 10 - Directors and Executive Officers
of the Registrant. . . . . . . . . . . . . . . . . . 13
Item 11 - Executive Compensation . . . . . . . . . . . . . . . 13
Item 12 - Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . . 13
Item 13 - Certain Relationships and Related Transactions . . . 13
PART IV
Item 14 - Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . . . . . 14
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
PART I
Item 1. Business.
- ------ ---------
General
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Fred Meyer, Inc. (the "Company") is a leading regional retailer of
a wide range of food, apparel, fine jewelry and products for the home. At
January 28, 1995, the Company operated 131 stores in Oregon, Washington,
Utah, Alaska, Idaho, Northern California, and Montana under the name "Fred
Meyer." Of these stores, 100 are free-standing, multidepartment stores,
averaging 140,814 square feet of retail space, that emphasize
one-stop-shopping for necessities and items of everyday use. Of the 100
multidepartment stores, 86 contain food and nonfood departments, and 14
contain nonfood departments only. The multidepartment stores with food
average 148,354 square feet. The Company's multidepartment stores accounted
for approximately 99 percent and 94 percent, respectively, of the Company's
total sales and operating income for the Company's 1994 fiscal year ended
January 28, 1995. Of the 31 specialty stores, 26 are jewelry stores located
in regional malls. The Company's multidepartment stores contain up to seven
departments which include food, the home, apparel, home electronics, fine
jewelry, health and beauty aids, and pharmacy. The Company's multidepartment
stores are unique in the Pacific Northwest in combining food with a wide
range of nonfood merchandise under one roof. For the 1994 fiscal year, food
and nonfood sales were 38.3 percent and 61.7 percent of total sales,
respectively.
The Company's principal business strategy is to operate
one-stop-shopping stores that provide convenient shopping for a broad
selection of products in one location. Stores are organized into distinct
departments that specialize in the sale of particular products. The Company
believes that its business strategy has generated high per-store sales
volume and frequent shopping by area residents, and that its departments
achieve such sales volume because they are located within one-stop-shopping
stores. The strength of the individual departments, with their breadth and
depth of product selection, national and private label brands, and emphasis
on products of everyday use, distinguishes the Company's stores from other
retailers and enables it to compete successfully with supermarkets,
drugstores, discount stores, mass merchandisers, department and specialty
stores. The Company promotes cross-shopping by providing convenient access
between departments, making each department a strong competitor in the
market for its products and by facilitating easy customer checkout through a
cash register system that allows customers to purchase merchandise from any
department at any checkout location ("common checkout").
During the past several years, the Company has committed
substantial capital and management resources to improve its
one-stop-shopping strategy, allowing it to better serve its customers and
respond to the many new competitors entering its markets. New competitors
in the past five years include Wal-Mart, Food 4 Less, Cub Foods, Home Depot,
HomeBase, Eagle, Sam's Club, Incredible Universe, Good Guys, and Circuit
City. During the same period, the Company also faced increased competition
from existing major national and regional retailers, including Safeway,
Albertson's, Price/Costco, Lamonts, Mervyn's, PayLess, Penneys, Carrs, QFC,
Kmart, Target, ShopKo, and Toys-R-Us. Notwithstanding the competitive
environment and a slowdown in economic conditions in some of the Company's
markets, the Company has been able to achieve total and comparable store
sales growth averaging 7.2 percent and 2.2 percent, respectively, over the
past five years (based on 52-week years). Total store sales for 1994
increased 5.0 percent, and comparable store sales decreased 2.0 percent over
the prior year. Sales growth in the last half of 1994, and continuing into
1995, has been negatively affected by a strike which started on August 18,
1994 involving a multiemployer group of unionized food stores in the greater
Portland, Oregon area, including 26 of the Company's stores, which were the
only stores picketed. At approximately the same time, a series of strikes
also began at the Company's Portland area distribution center, dairy plant,
trucking operations, and main office. These
strikes were settled during the period from September 23, 1994 to
November 13, 1994. For additional information regarding the strikes, see
"Employees" below and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations."
During the past five years, the Company implemented common checkout
for the majority of its multidepartment stores to complement its storewide
merchandising efforts. The Company also remodeled 29 multidepartment stores
and redesigned and remodeled many food departments to include in-store
bakeries, delicatessens, and service fish markets to respond to customer
shopping preferences. Beginning in 1987, the Company implemented an
everyday low pricing strategy in its food operations. In 1989, the Company
reorganized its operating management structure and for each store designated
a store director responsible for store operations and profitability and
departmental cross-merchandising. In 1992 the Company augmented its store
management structure by establishing a regional management structure of six
regional management teams closely aligned with the stores in the regions.
Since 1990, management focused increased attention on the Company's
expenses. Through 1994 this focus decreased expenses as a percent of sales
by 2.18 percent for advertising, store labor, store occupancy, and corporate
support department expenses, offset in part by increases in information
services ("IS") expenses of .89 percent, resulting in a net decrease of 1.29
percent. 1994's results were negatively affected by the strikes in the
Portland area. The Company is continuing to pursue expense reductions as
part of its efforts to improve its financial performance.
The Company's capital expenditure budget for its 1995 fiscal year
is $257,000,000 compared with capital expenditures of approximately
$284,000,000 in 1994. Beginning in 1993, the Company implemented a plan to
increase new store development in its existing markets and to increase the
level of remodeling of existing stores. As a result, the Company plans to
open at least six new multidepartment stores and remodel between six and
nine existing stores in each of the five fiscal years beginning in 1995.
Total retail space increased by approximately 6.0 percent per year in 1993
and 1994. The Company constructed a new flow-through retail service center
in Chehalis, Washington in 1994 to distribute apparel, general merchandise,
and music products, and will be opening a food distribution facility near
Seattle, Washington in June 1995. In addition, the Company is continuing
its program to replace and upgrade its old IS system with new architecture
and application programs. The Company's new distribution facilities and new
IS system are designed to improve operations, permit better inventory
management and reduce distribution costs.
The Company was incorporated in Delaware in 1981, as a successor to
the business of a company which was incorporated in Oregon in 1923. The
Company's principal executive offices are located at 3800 SE 22nd Avenue,
Portland, Oregon 97202, and its telephone number is (503) 232-8844.
References in this Form 10-K to the Company mean Fred Meyer, Inc., including
its subsidiaries, unless the context requires otherwise.
The following table sets forth certain statistical information with
respect to the Company's operations for the periods indicated:
Fiscal Year Ended
--------------------------------------------------------------------------------
January 28, January 29, January 30, February 1, February 2,
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
Percent of net sales:
Nonfood sales 61.7% 62.5% 63.3% 63.7% 64.3%
Food sales 38.3% 37.5% 36.7% 36.3% 35.7%
Sales per square foot of
selling space (weighted average) $304/4 $312 $304 $283 $269
Total stores sales growth 5.0%/4 4.4% 5.6% 9.2% 11.6%/1
Comparable store sales percentage increase:/2
Total Company (2.0%)/4 2.4% 3.0% 4.0% 3.6%/1
Food (3.0%)/4 3.4% 2.8% 4.5% 8.3%/1
Nonfood (1.4%)/4 1.9% 3.2% 3.8% 1.1%/1
Number of multidepartment stores:
Operated at end of period 100 97 94 94 94
Opened 5 5 2 3 5
Closed 2 2 2 3 6
Remodeled 7 7 5 3 7
Number of specialty stores:
Operated at end of period 31 30 29 28 28
Opened 3 2 4 -- --
Closed 2 1 3 -- 2
Remodeled -- -- -- -- --
Total number of stores:
Operated at end of period 131 127 123 122 122
Opened 8 7 6 3 5
Closed 4 3 5 3 8
Remodeled 7 7 5 3 7
Total retail square feet:
At beginning of period 13,423,000 12,646,000 12,679,000 12,213,000 11,743,000
Added by new stores opened 795,000 811,000 295,000 584,000 940,000
Added by remodeling
of existing stores 174,000 80,000 39,000 63,000 24,000
Less closed stores 198,000 114,000 367,000/3 181,000 494,000
At end of period 14,194,000 13,423,000 12,646,000 12,679,000 12,213,000
__________________
<FN>
1 Excludes 53rd week in the year ended February 3, 1990 for comparison purposes.
2 Includes only sales of stores operating throughout each of the periods compared.
3 Includes square footage for 30 restaurants that were converted to tenant space.
4 Affected by a series of labor disputes in the greater Portland, Oregon area in 1994.
Business Strategy
-----------------
The Company's principal business strategy is to operate
one-stop-shopping stores that provide convenient shopping for a broad
selection of products in one location. Stores are organized into distinct
departments and sections within departments that specialize in the sale of
particular products. The Company promotes cross-shopping through convenient
access between departments, by making each department a strong competitor in
the market for the products it sells and by providing easy customer checkout
through its common checkout system that allows customers to purchase
merchandise from any department at any checkout location.
Breadth and Depth of Selection. In most of its stores, the Company
------------------------------
sells over 225,000 items, including a wide selection of food, apparel, and
products for the home, with an emphasis on necessities and items of everyday
use. The Company takes advantage of the stores' high and diverse customer
traffic to sell many categories of goods which are purchased on a
discretionary basis, such as fine jewelry, home electronics, and fashion
apparel. Within many categories of apparel, products for the home, fine
jewelry, and home electronics, the Company offers customers the breadth of
selection normally afforded by department or specialty stores. Its
selection of food and groceries is comparable to that of large supermarkets.
The Company emphasizes the sale of popular brands and its own private label
brands.
Multidepartment Stores. The Company's large stores are organized
----------------------
into departments and sections within departments that specialize in the sale
of particular products. The Company endeavors to create individual,
recognizable identities for each department through specialized design,
fixtures, and decor. In most stores, common checkout areas allow the
checkout of items from the Company's many departments at any cash register
and facilitates convenient shopping. Most of the Company's departments are
self-service, except in areas where special assistance is required, such as
service delicatessens, home electronics, fine jewelry, and pharmacy. Stores
consist of up to seven departments which are comprised of a variety of
specialty sections. Departments and specialty sections within the large
Fred Meyer stores include full-service food, pharmacy, nutrition,
housewares, domestics, paint and home decor items, plumbing and electrical
items, hardware and tools, building materials, garden, floral, sporting
goods, automotive, home office supplies and stationery, cards and books,
toys, basic and fashion apparel for all ages, shoes, home electronics, and
fine jewelry. Multidepartment stores that include food departments best
represent the Company's strategy. In more recent years the Company has been
adding food to previously nonfood multidepartment stores and replacing some
of its older nonfood stores with new full-service stores including food
departments.
Store and Regional Management. In 1989, the Company reorganized
-----------------------------
its operating management structure and for each store designated a store
director responsible for store operations and profitability and departmental
cross-merchandising. Departments within multidepartment stores are managed
by merchandising managers, who report to store directors. Each store
director and department manager is supported by a regional manager and other
senior managers who specialize in the market for products sold in the
stores. In 1992, the Company augmented its store management structure by
establishing regional management teams that work closely with the stores in
their region to enhance sales and profit opportunities. As a result of its
specialized management structure, the Company believes that each store and
each department within the store better serves its customers and is able to
respond quickly to market changes.
Location and Store Design. New store sites are determined based on
-------------------------
a review of information on demographics and the competitive environment for
the market area in which the proposed site is located. The Company's
expansion focus is in existing areas of operation, primarily in or near
well-populated residential areas. The Company determines store size and
designs stores with a view toward making each store a very convenient,
one-stop-shopping store in the area it serves. In 1992, the Company
standardized its store design with two basic sizes of approximately 145,000
square feet and 165,000 square feet. In 1994, a 125,000 square foot store
design was developed to facilitate entry into smaller markets. The Company
anticipates using a given prototype depending on the market to be served and
the size of the site being developed. The Company is flexible in its store
design where land sites require specialized designs.
Promotion and Advertising. The Company aggressively promotes sales
-------------------------
for all departments through weekly advertising, primarily in local and area
newspapers, radio and television. Advertising often features many
high-demand products at competitive prices. Sale items are usually items
regularly sold in the departments. The Company emphasizes everyday low
prices in its food departments and for certain nonfood items, and generally
offers promotional sale pricing in its nonfood departments. The Company
believes that it is known for competitive pricing and its customer-friendly
return policy.
Information Services. In 1991, the Company began a program to
--------------------
modernize its systems to better support its business. A new computer
network was installed, allowing every store to be linked with the main
office and distribution centers. In 1992, Quick Response inventory
management was initiated through the introduction of automatic replenishment
for certain goods and electronic data interchange systems with vendors. A
new pharmacy system was added in multidepartment stores. In 1993, the
Company continued Quick Response by installing a new distribution system and
by beginning the implementation of new inventory and merchandise management
systems. In 1994, the Company's Continuous Replenishment Program was
strengthened by the implementation of new jewelry, music and video, and item
performance systems. These modernized systems provide the Company with easy
access to actionable information for better inventory turnover and control,
reduced distribution costs, improved expense controls, and better customer
service. In 1995, the Company expects to begin rolling out its new
merchandising information system for nonfood departments, direct store
delivery system for food departments, and an upgrade of its store register
systems.
Retail Operations
-----------------
The Company's stores contain up to seven departments. Within each
department is a variety of merchandise sections operated like specialty
businesses. The following table sets forth the number of departments (and
lists certain of the sections within the Home and Apparel departments) in the
Company's 100 multidepartment stores at January 28, 1995:
Food. . . . . . . . . . . . . . . . . . . . . . . . . . 86
Nonfood . . . . . . . . . . . . . . . . . . . . . . . .100
The Home . . . . . . . . . . . . . . . . . . . . . .100
Housewares, Domestics, and Home Decor
Sporting Goods
Garden
Home Improvement and Automotive
Toys
Cards and Books
Variety and Seasonal
Home Electronics . . . . . . . . . . . . . . . . . .100
Apparel. . . . . . . . . . . . . . . . . . . . . . .100
Apparel
Cosmetics
Shoes
Pharmacy . . . . . . . . . . . . . . . . . . . . . . 99
Health and Beauty Aids . . . . . . . . . . . . . . .100
Fine Jewelry . . . . . . . . . . . . . . . . . . . . 87
The Food Department is typically the same size as free-standing
super food stores of competitors and carries a wide variety of national
brands together with the Company's private label brands of grocery items
which are Fred Meyer, President's Choice, and FMV (Fred Meyer Value).
Beginning in 1992, the Company implemented a program to increase sales of
its private label grocery items. As a result, sales of private
label grocery items as a percentage of total grocery sales have increased to
a current level of just over 20 percent from 12 percent in 1991. Private
label items generally are sold at lower prices to the customer and generate
higher margins for the Company than national brand products. The Company
also carries fresh produce, meat, dairy products, nutritional products,
bakery products, candy, and tobacco, all sold on a self-selection basis.
Most food departments contain a nutrition section that includes name brand
and generic natural foods, dairy products, juices, vitamins, supplements,
sugar-free and fat-free products, and meat substitutes. Certain items, such
as grains, nuts, fruits, and natural snacks, are also displayed in bulk to
enable customers to buy any amount and package their own purchases. In many
multidepartment stores, the Company operates in-store bakeries and service
departments that offer fresh seafood, delicatessen and meat products. The
Company's newer stores include sit-down
eating areas near in-store delicatessens and international take-out
departments. The following table sets forth the number of nutrition,
in-store bakery, and service departments at January 28, 1995:
Nutrition. . . . . . . . . . . . . . . . . . . . . . . 89
Bakery . . . . . . . . . . . . . . . . . . . . . . . . 83
Service Delicatessen . . . . . . . . . . . . . . . . . 83
Service Fish Market. . . . . . . . . . . . . . . . . . 61
Service Meat Market. . . . . . . . . . . . . . . . . . 34
The Home Department offers a wide selection of home decor,
housewares, small appliances, domestics, furniture, sporting goods, greeting
cards, books, floral products, power lawn mowers, garden tools, fertilizers
and chemicals, toys, seasonal and holiday merchandise, hardware, tools,
paint, building materials, plumbing and electrical fixtures, automotive
supplies, and related accessories. Some of the national brands featured are
Braun, Kitchen-Aid, Coleman, Rowenta, De Longhi, Glidden, and Weber. Home
improvement, garden and automotive sections feature many items for the
do-it-yourself customer. High quality private label products under our
Northwest Home, Turf King and Kraft King labels complement our national
brand offering.
The Apparel Department offers moderately priced national brand and
private label apparel, sportswear, cosmetics, accessories, and family and
active shoes. Major national brands carried by the apparel departments
include Levi's, Jockey, Maidenform, Vanity Fair, Nike, Reebok, Adidas,
Gotcha, Eastland, Union Bay, Columbia Sportswear, Capezio, Lee, Bali, and
Keds. High quality private label products such as Fred Bear, Katherine
Bishop, and KB & Co. labels complement our national brand offering.
The Company's private label sales in the Home and Apparel
categories represents 12-13 percent of these categories' sales, with a goal
of approximately 15 percent. The strategy employed in nonfood departments
is to use private label products as entry-level price points.
The Home Electronics Department offers the latest name-brand
high-technology merchandise, such as televisions, audio components,
camcorders, cellular phones, computers, computer software, and a large
selection of video games. Some of the national brands featured are SONY,
JBL, Pioneer, IBM, and Magnavox. It also offers a large selection of compact
discs, tapes, and for-sale video, and includes a photo-finishing section.
One-hour photo-finishing has also been added to selected locations.
The Pharmacy Department sells a full line of name brand and generic
prescription drugs dispensed by full-time licensed pharmacists and
participates with all major third party HMO and PPO plans.
The Health and Beauty Aids Department offers a wide selection of
national and private label brands of health and beauty aid products. It
also offers candy and confections and dietary food products.
The Fine Jewelry Department offers an extensive selection of bridal
jewelry and diamond fashion jewelry, including precious and semi-precious
stones. It also offers name brand watches and an assortment of 14-carat
gold chains and earrings.
Most of the Company's multidepartment stores open from 7:00 a.m. to
9:00 a.m. and close between 10:00 p.m. and 11:00 p.m., seven days a week,
including all holidays except Christmas. Most of the Company's multi-
department store locations have unaffiliated tenants which offer goods and
services complementing those offered by the Company, such as banks, optical
centers, coffee shops, restaurants, self-service laundries, insurance
agencies, and beauty and barber shops. The Company's specialty store hours
vary depending on location.
The Company honors most nationally recognized credit cards for
sales in all of its departments. In addition, the Company has its own
credit card program which is serviced by a national credit card processor
and is generally on a nonrecourse basis. Beginning in 1992, the Company
began accepting debit cards that do not require customer-activated personal
identification number ("PIN") pads.
Store Expansion and Development
-------------------------------
The Company enlarges, remodels, closes or sells stores in light of
their past performance or the Company's assessment of their potential. The
Company continually evaluates its position in its various market areas to
determine whether it should expand or consolidate its operations in those
areas. In 1989 and 1990, the Company opened a total of nine new
multidepartment stores and remodeled seventeen existing stores. In 1991 and
1992, new store openings, development, and remodeling activity declined to a
combined total of five new multidepartment stores and eight remodels while
the Company focused on reducing expenses and improving profitability.
Beginning in 1993, the Company implemented a plan to increase new store
development in its existing markets and to increase the level of remodeling
of existing stores. During 1993, the Company opened five new
multidepartment stores, one of which replaced an older store; closed two
multidepartment stores (including the one store that was replaced); and
remodeled seven stores. During 1994, the Company opened five new
multidepartment stores, closed two multidepartment stores, and remodeled
seven multidepartment stores. Generally, the Company plans to open at least
six new multidepartment stores and remodel between six and nine existing
stores in each of the five years beginning in 1995. In 1994, capital
expenditures for new store development and remodels were approximately
$172,000,000, compared with expenditures in 1993 of approximately
$156,000,000. A portion of this increase reflects spending for stores to
open in 1995. For 1995, the company anticipates its capital expenditures
for new store development and remodels will be approximately $192,000,000.
Total retail space increased 771,000 square feet during 1994,
representing an increase of approximately 5.7 percent. New multidepartment
store openings during the year 1994 were as follows:
Total
Retail Space
Location Square Footage Opened
-------- -------------- ---------------
Soldotna, Alaska . . . . . . . . . . . 156,000 April, 1994
Brookings, Oregon. . . . . . . . . . . 142,000 April, 1994
East Vancouver, Washington . . . . . . 165,000 July, 1994
Boise, Idaho . . . . . . . . . . . . . 163,000 August, 1994
Bonney Lake (Seattle), Washington. . . 165,000 September, 1994
Planned new multidepartment store openings during the year 1995 are as
follows:
Total
Retail Space Planned
Location Square Footage Opening
-------- -------------- ---------------
Monroe, Washington . . . . . . . . . . 152,000 May, 1995
Lake City (Seattle), Washington. . . . 123,000 August, 1995
Renton (Seattle), Washington . . . . . 174,000 September, 1995
West Jordan (Salt Lake City), Utah . . 170,000 September, 1995
Salt Lake City, Utah . . . . . . . . . 173,000 September, 1995
Kennewick, Washington. . . . . . . . . 170,000 November, 1995
/TABLE
Distribution and Processing
---------------------------
The Company operates a centralized distribution facility in a complex
at Clackamas, Oregon, near Portland, containing 1,528,000 square feet, and a
310,000 square-foot flow-through retail service center in Chehalis,
Washington. Approximately two-thirds of the merchandise the Company sells
is currently shipped from its Clackamas and Chehalis facilities, with the
balance shipped directly by vendors to the Company's stores or, in the case
of food products for its Idaho and Utah stores, purchased from a major
wholesale supplier.
As a result of its recent investment in IS systems and distribution
facility improvements, the Company has been able to establish EDI and
automated replenishment programs with many vendors. These "quick response"
capabilities are designed to improve inventory management and reduce
handling of inventory in the distribution process, which the Company
believes will result in lower markdowns and lower distribution costs.
The Company believes that its distribution and related IS systems
provide it with several advantages. First, they permit its stores to
maintain proper inventory levels for more than 190,000 items supplied
through its central distribution centers. Second, centralized purchasing
and distribution reduces the Company's cost of merchandise and related
transportation costs. Third, because distribution can be made to stores
frequently, the Company is able to reduce the in-store stockroom space and
maximize the square footage available for retail selling. Fourth, the
Company is able to lower its total level of inventory investment and related
financing costs.
The Company opened its new flow-through retail service center in
April, 1994 in Chehalis, Washington to serve as the centralized processing
facility for certain apparel, music, and other nonfood items. This facility
eliminates approximately 370,000 square feet of leased warehouse space,
including the Company's 122,000 square-foot Salt Lake City facility. It
will also allow the Company to meet its nonfood distribution center needs
past the year 2000. The Company's new Chehalis facility is designed to
minimize the required handling and processing of goods received from vendors
and distributed to the Company's stores. The Company believes that this
flow-through system will enable it to improve inventory management and to
further reduce the distribution costs for the goods shipped through this
facility. In June 1995 the Company expects to open a new 600,000
square-foot centralized food distribution facility in Puyallup, Washington,
near Seattle, to serve stores in the Puget Sound Region and Alaska. This
facility will significantly reduce the cost of transporting goods into the
Puget Sound and Alaska markets, and will afford the Company increased
forward-buying opportunities for its food operations.
The Company operates a large fleet of trucks for distribution of goods
to its retail stores and operates a central bakery and dairy.
Corporate Capital Expenditures
------------------------------
Total capital expenditures for 1994 were approximately
$284,000,000, which includes one store the Company purchased from one of its
lessors. The Company also completed construction of a new wing to its main
office complex, permitting consolidation of its corporate offices into one
facility from the three locations it previously occupied in the Portland,
Oregon area. In addition to the new store and remodel program, the Company
is initiating or continuing many capital projects aimed at improving
operating efficiencies, including improvements to its distribution centers,
central bakery, dairy plant, and continued IS enhancements. In 1995, the
Company estimates total capital expenditures to be $257,000,000.
During 1994, the Company incurred a charge of $15,978,000
($9,906,000 after a deferred tax benefit of $6,072,000) related to the
writedown of certain assets and other costs associated with the Company's
decision to exit the northern California market, except for two jewelry mall
locations.
Competition
-----------
The retail merchandising business is highly competitive and it is
projected to become more competitive in the years to come. Because of the
broad range of merchandise sold by the Company, it competes with many types
of retail companies, including national, regional, and local supermarkets,
discount stores, drug stores, conventional department stores and specialty
stores. The Company's competitive position in the retail business varies by
type of goods and the communities in which its stores are located. In the
last few years, many new competitors have entered the markets in which the
Company operates. New competitors in the past five years include Wal-Mart,
Food 4 Less, Cub Foods, Home Depot, HomeBase, Eagle, Sam's Club, Incredible
Universe, Good Guys, and Circuit City. During the same period, the Company
also faced increased competition from existing major national and regional
retailers, including Safeway, Albertson's, Costco, Lamonts, Mervyn's,
PayLess, Penneys, Carrs, QFC, Kmart, Target, ShopKo and Toys-R-Us.
Notwithstanding the competitive environment and a slowdown in economic
conditions in some of the Company's markets, the Company has been able to
achieve total and comparable store sales growth averaging 7.2 percent and
2.2 percent, respectively, over the past five years (based on 52-week
years). These averages were negatively affected by a series of labor
disputes in the greater Portland, Oregon area in 1994.
The Company emphasizes customer satisfaction, large selections of
high-quality popular products, and competitive pricing. In addition, the
Company believes that the convenience, attractiveness and cleanliness of its
stores, together with a sales staff knowledgeable in specialty areas,
enhances its retail sales efforts.
Employees
---------
The Company employs approximately 27,000 full- and part-time
employees. Approximately 50 percent of the Company's employees are
represented by 32 different labor unions (or locals). These employees are
covered by 110 different collective bargaining agreements, none of which
covers more than 2,600 employees. Approximately 34 percent of the
agreements will expire during 1995, including agreements covering employees
in both large metropolitan and smaller non-metropolitan areas where the
Company operates. The last work stoppages the Company experienced involved
the multiemployer bargaining unit for food clerks, checkers, and meatcutters
in Portland, Oregon, which lasted 88 days. At the same time, Company union
employees at its distribution facilities, trucking operation, dairy and a
small portion of its office employees went on strike. Coos Bay, Oregon
nonfood employees went on strike in late 1994 and returned to work on
January 14, 1995. There were no work stoppages in 1991, 1992 or 1993. The
Company believes that it has good relations with the many unions
representing its employees.
In 1995, the Company reached agreement on its contracts covering
nonfood and food workers in the Seattle/Tacoma area. While progress is
being made on remaining contracts which expire in 1995, and the Company is
optimistic about reaching agreements, no assurance can be given that the
parties will be able to reach a final conclusion without the occurrence of a
work stoppage.
Item 2. Properties.
- ------ ----------
As a part of the leveraged buyout transaction in which the Company
was incorporated in 1981, Fred Meyer Real Estate Properties, Ltd., whose
name was changed in 1991 to Real Estate Properties Limited Partnership
("Properties"), acquired the real estate assets of the corporation that was
the predecessor to the Company.
In 1986, the Company amended and restated 76 leases relating to 71
stores, its distribution center, and four other facilities. The leases
provide, among other things: (1) fixed rent expense in the aggregate for
accounting purposes over the initial term of the leases at levels below rent
expense under the prior leases for the fiscal year ended January 30, 1988;
(2) initial lease terms generally averaging 20 years; (3) future rent from
certain unrelated subtenants to be paid to the Company; and (4) seven
five-year renewal options under leases for the 36 leased properties owned by
Metropolitan Life Insurance Company (the "Institutional Investor") at rents
for the first five option periods below the average rents during the initial
term, and an option for the Company to purchase any of the leased properties
at the end of the initial term and at the end of each option period.
Properties sold to the Institutional Investor its interest in 36 of the 76
properties which were leased to the Company. The Institutional Investor is
also an investor in Properties and FMI Associates. At March 1, 1994, FMI
Associates beneficially owned approximately 38.0 percent of the Company's
common stock.
Twenty-four store locations and four other facilities are owned by
the Company and its subsidiaries. The balance of the Company's locations
are leased from the Institutional Investor, Properties or third parties.
All of the Company's stores and its distribution and processing facilities
are in good condition. Of the Company's 100 multidepartment stores, 88
percent have either been built or received a major remodel in the last ten
years. Additionally, the Company owns eighteen parcels of land. Thirteen
are being held for development of future stores, and three in California and
two in Washington are being held for sale.
The following table as of January 28, 1995, summarizes the
remaining lease years, assuming the exercise of all options, for store
locations and the Company's distribution facilities, warehouses, and plants.
Distribution Facilities
Store Locations Warehouses & Plants
------------------------- ---------------------------
Remaining Number Square Ft. of % of Total Square Ft. of % of Total
of Lease Years Retail Space Square Ft. Facility Space Square Ft.
- ------------------- ------------ ---------- -------------- ----------
Less than 5 years 255,463 1.80% 100,104 4.14%
5 through 15 years 293,703 2.07% --- 0.00%
16 through 25 years 3,257,757 22.95% --- 0.00%
Over 25 years 7,001,877 49.33% 1,527,875 63.20%
---------- ------- --------- -------
Total Leased 10,808,800 76.15% 1,627,979 67.34%
---------- ------- --------- -------
Owned Properties 3,385,390 23.85% 789,414 32.66%
---------- ------- --------- -------
Total 14,194,190 100.00% 2,417,393 100.00%
========== ======= ========= =======
Item 3. Legal Proceedings.
- ------ -----------------
The Company and its subsidiaries are parties to various legal
claims, actions, and complaints which have arisen in the ordinary course of
business. Although the Company is unable to predict with certainty whether it
will ultimately be successful in these legal proceedings or, if not, what the
impact might be, management presently believes that disposition of these
matters will not have a material adverse effect on the Company's consolidated
financial position or consolidated results of operations.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------ ---------------------------------------------------
Not applicable.
Item 4(a). Executive Officers of the Registrant.
- --------- ------------------------------------
As of March 1, 1995, the executive officers of the Company were as
set forth below.
Original
Date of
Name Age Position Employment
- ------------------ --- ------------------------------ ----------
Robert G. Miller 50 Chairman of the Board and 1991
Chief Executive Officer
Cyril K. Green 63 President and Chief Operating 1947
Officer
R. Eric Baltzell 54 Senior Vice President, Stores 1962
Roger A. Cooke 46 Senior Vice President, 1992
General Counsel and Secretary
Edward A. Dayoob 55 Senior Vice President, 1973
Jewelry Group
Curt A. Lerew, III 47 Senior Vice President, Food Group 1991
Keith W. Lovett 51 Senior Vice President, 1992
Human Resources
Ronald J. McEvoy 47 Senior Vice President, 1991
Chief Information Officer
Norman O. Myhr 47 Senior Vice President, 1978
Sales Promotion and Marketing
Cheryl D. Perrin 56 Senior Vice President, 1976
Public Affairs
Mary F. Sammons 48 Senior Vice President, 1973
General Group
Kenneth Thrasher 45 Senior Vice President - Finance 1982
and Chief Financial Officer
Scott L. Wippel 41 Senior Vice President, 1992
Corporate Facilities
The executive officers of the Company are elected annually for one
year and hold office until their successors are elected and qualified.
There are no family relationships among the executive officers of the
Company.
Mr. Miller became Chairman of the Board and Chief Executive Officer of
the Company in August of 1991. Prior to that time he was employed by
Albertson's, where his most recent positions were Executive Vice President
of Retail Operations from 1989 to 1991, and Senior Vice President and
Regional Manager from 1985 to 1989. Mr. Miller has more than 30 years of
experience in the retail food industry.
Mr. Green became President and Chief Operating Officer in 1972, and
has been with the Company since 1947. He has held many positions with the
Company prior to his election to President.
Mr. Baltzell served as Vice President, Food Operations of the Company
from 1982 until his election as Senior Vice President, Store Operations
Division in June 1989.
Mr. Cooke became Vice President, General Counsel and Secretary of the
Company in August 1992. He was elected Senior Vice President in April 1993.
From 1982 to 1992, he was an officer of Pan American World Airways, Inc.,
serving as Senior Vice President and General Counsel from 1990 to 1992.
From 1973 to 1980, he was associated with the law firm Simpson Thacher and
Bartlett.
Mr. Dayoob served as Vice President, Jewelry Division of the Company
from 1979 until his election as Senior Vice President, Photo Electronics and
Jewelry Division in June 1989. This Division was renamed the Home
Electronics and Jewelry Group in 1990. The Home Electronics Division was
merged into the General Group in 1993.
Mr. Lerew became Senior Vice President, Food Group in October 1991.
Prior to that time he was employed by Albertson's, where his most recent
positions were Senior Vice President and Regional Manager in 1991, Senior
Vice President of Corporate Merchandising from 1990 to 1991, and Vice
President, Western Washington Division, from 1987 to 1990. Mr. Lerew has
more than 30 years of experience in the retail food industry.
Mr. Lovett became Senior Vice President, Human Resources of the
Company in February of 1992. Prior to that time he was employed by Eagle
Food Centers, where he was Senior Vice President of Human Resources and Vice
President of Industrial Relations.
Mr. McEvoy became Senior Vice President, Chief Information Officer in
charge of the Company's Information Services in July 1991. For the year
prior to that, he worked for IBM United States as a business advisor in the
retail industry. From 1987 to 1990, he was Senior Vice President for
Management Information Systems (MIS) for J.B. Ivey. He held the same
position from 1983 to 1987 with John Wanamaker. He also held various MIS
and financial positions with Hecht's from 1969 to 1983.
Mr. Myhr served as Vice President, Sales Promotion of the Company from
1982 until his election as Senior Vice President, Strategic Marketing in
June 1989. He now serves as Senior Vice President, Sales Promotion and
Marketing.
Ms. Perrin served as Vice President, Government Affairs from 1985
until her election as Vice President, Public Affairs in 1988. She was
elected Senior Vice President, Public Affairs in April 1992.
Ms. Sammons served as Vice President within the Soft Goods Division of
the Company from 1980 until her election as Senior Vice President, Soft
Goods Division in January 1986. In June 1989, she was elected Senior Vice
President, General Merchandise Division. This Division was renamed the
General Group in 1990.
Mr. Thrasher served as Vice President, Corporate Treasurer of the
Company from 1982 until his election as Vice President - Finance, Chief
Financial Officer, and Secretary in June 1987. He was elected Senior Vice
President - Finance and Chief Financial Officer effective March 1989.
Mr. Wippel became Vice President, Corporate Facilities in June 1992.
He was elected Senior Vice President in April 1993. Prior to that, he was
employed by Albertson's, where his most recent positions were Vice President
of Real Estate from 1990 to 1992 and Director of Real Estate from 1988 to
1990.
PART II
Item 5. Market for the Registrant's Common Stock and Related
- ------ ----------------------------------------------------
Stockholder Matters.
-------------------
The information required by this item is included under "Common
Stock Information" on page 12 of the Company's 1994 Annual Report to
Shareholders and is incorporated herein by reference.
Item 6. Selected Financial Data.
- ------ -----------------------
The information required by this item is included under "Selected
Financial Data" on pages 8 and 9 of the Company's 1994 Annual Report to
Shareholders and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
- ------ -------------------------------------------------
Condition and Results of Operations.
-----------------------------------
The information required by this item is included under
"Management's Discussion and Analysis" on pages 10 through 12 of the
Company's 1994 Annual Report to Shareholders and is incorporated herein by
reference.
Item 8. Financial Statements and Supplementary Data.
- ------ -------------------------------------------
The information required by this item is incorporated by reference
from the Company's 1994 Annual Report to Shareholders as listed in Item 14
of Part IV of this Report.
Item 9. Changes in and Disagreements with Accountants
- ------ ---------------------------------------------
on Accounting and Financial Disclosure.
--------------------------------------
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
- ------- --------------------------------------------------
Information with respect to directors of the Company is included
under "Election of Directors" in the Company's Proxy Statement for its 1995
Annual Meeting of Shareholders and is incorporated herein by reference.
Information with respect to executive officers of the Company is included
under Item 4(a) of Part I of this Report.
Item 11. Executive Compensation.
- ------- ----------------------
Information with respect to executive compensation is included
under "Executive Compensation" in the Company's Proxy Statement for its 1995
Annual Meeting of Shareholders and is incorporated herein by reference,
except for items appearing under the subheadings "Compensation Committee
Report on Executive Compensation" and "Comparison of Five Year Cumulative
Total Return" which are not incorporated herein.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
- ------- --------------------------------------------------------------
Information with respect to security ownership of certain
beneficial owners and management is included under "Voting Securities and
Principal Shareholders" and "Election of Directors" in the Company's Proxy
Statement for its 1995 Annual Meeting of Shareholders and is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions.
- ------- ----------------------------------------------
Information required by this item is included under "Certain
Transactions" in the Company's Proxy Statement for its 1995 Annual Meeting
of Shareholders and is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- ------- ----------------------------------------------------------------
(a)(1) Financial Statements.
--------------------
The following documents are included in the Company's 1994 Annual
Report to Shareholders at the pages indicated and are incorporated herein by
reference:
Page in 1994 Annual
Report to Shareholders
----------------------
Fred Meyer, Inc. and Subsidiaries:
Consolidated Balance Sheets -
January 28, 1995 and January 29, 1994 14-15
Statements of Consolidated Operations -
Years Ended January 28, 1995, January 29, 1994,
and January 30, 1993 13
Statements of Consolidated Cash Flows -
Years Ended January 28, 1995, January 29, 1994,
and January 30, 1993 16
Statements of Changes in Consolidated
Stockholders' Equity -
Years Ended January 30, 1993,
January 29, 1994, and January 28, 1995 17
Notes to Consolidated Financial Statements 18-23
Independent Auditors' Report 24
(a)(2) Financial Statement Schedules.
-----------------------------
All schedules are omitted as the required information is inapplicable or
is presented in the financial statements or related notes thereto.
(a)(3) Exhibits.
--------
3A Restated Certificate of Incorporation of Fred Meyer,
Inc. Incorporated by reference to Exhibit 3A to the
Company's Registration Statement on Form S-1,
Registration No. 33-8574.
3B Amended and Restated Bylaws of Fred Meyer, Inc.
Incorporated by reference to Exhibit 4B to the Company's
Registration Statement on Form S-8, Registration
No. 33-49638.
4A Specimen Stock Certificate. Incorporated by reference
to Exhibit 4C to the Company's Registration Statement on
Form S-3, Registration No. 33-67670.
4B Credit Agreement dated as of June 30, 1994, among Fred
Meyer, Inc., various banks named therein, and Bank of
America as Agent.
4C Term Promissory Notes in an original aggregate principal
amount of $70,000,000, including the Intercreditor
Agreement dated June 29, 1993 among the Company, and
various banks and financial institutions named therein.
Incorporated by reference to Exhibit 4E to the Company's
Registration Statement on Form S-3, Registration
No. 33-67670.
4D Note agreement dated as of June 1, 1994, in an original
aggregate principal amount of $57,500,000, among Fred
Meyer, Inc., and various life insurance companies.
4E Credit Agreement dated as of March 6, 1995, among Fred
Meyer, Inc., various financial institutions named
therein, and The Bank of Nova Scotia as Agent.
*10A-1 Fred Meyer, Inc. 1983 Stock Option Plan, as amended.
Incorporated by reference to Exhibit 10D to the
Company's Annual Report on Form 10-K for the year ended
January 28, 1989 (File No. 0-15023).
*10A-2 Fred Meyer, Inc. 1990 Stock Incentive Plan, as amended.
Incorporated by reference to Exhibit 28 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
August 18, 1990 (File No. 0-15023).
*10B Fred Meyer, Inc. Bonus Plan Description, as amended.
10C Assumption Agreement and Unconditional Guaranty of
Certain Obligations, dated December 11, 1981, among Fred
Meyer, Inc., The Predecessor Company, DTC Acquisition
Corporation, and Real Estate Properties Limited
Partnership (formerly Fred Meyer Real Estate Properties,
Ltd.). Incorporated by reference to Exhibit 10FF to the
Company's Registration Statement on Form S-1,
Registration No. 2-87139.
*10D Non-Employee Directors Stock Compensation Plan, adopted
November 17, 1992. Incorporated by reference to Exhibit
10F to the Company's Annual Report on Form 10-K for the
year ended January 30, 1993.
*10E Form of contract for Senior Executive Long-Term
Disability Program. Incorporated by reference to
Exhibit 10G to the Company's Annual Report on Form 10-K
for the year ended January 30, 1993.
*10F Fred Meyer Supplemental Income Plan dated January 1,
1994. Incorporated by reference to Exhibit 10H to the
Company's Annual Report on Form 10-K for the year ended
January 29, 1994.
*10G Employment Agreement between Fred Meyer, Inc. and
Robert G. Miller, as amended by Amendment No. 1.
*10H Indemnity Agreement. Incorporated by reference to
Exhibit 10I to the Company's Registration Statement on
Form S-1, Registration No. 33-8574.
10I Form of Lease Agreement for substantially identical
leases covering 36 stores and other locations leased by
Fred Meyer, Inc. (or a wholly owned subsidiary) from
Real Estate Properties Limited Partnership (formerly
Fred Meyer Real Estate Properties, Ltd.) including form
of Assignment of Master Lease wherein Fred Meyer Real
Estate Properties, Ltd. (now Real Estate Properties
Limited Partnership) assigned its interest to
Metropolitan Life Insurance Company and a First
Amendment to Lease Agreement, dated November 25, 1986,
with appendices containing certain nonstandard
provisions of the Lease Agreement and the First
Amendment; Collateral Matters Agreement and
Indemnification Agreement, each dated November 25, 1986,
between Fred Meyer, Inc. and Metropolitan Life Insurance
Company. Incorporated by reference to Exhibit 10I to
the Company's Annual Report on Form 10-K for the year
ended January 31, 1987 (File No. 0-15023). Memorandum
of First Amendment to Lease Agreement, dated March 6,
1987, between Metropolitan Life Insurance Company
("Metropolitan"), Landlord and Fred Meyer, Inc., Tenant;
and Assignment of Master Lease, dated March 6, 1987,
between Real Estate Properties Limited Partnership
(formerly Fred Meyer Real Estate Properties, Ltd.)
(Assignor) and Metropolitan (Assignee) for Nampa, Idaho.
Incorporated by reference to Exhibit 10I to the
Company's Annual Report on Form 10-K for the year ended
January 30, 1988 (File No. 0-15023).
10J Form of Lease Agreement for substantially identical
leases covering 27 stores and other locations subleased
by Fred Meyer, Inc. (or a wholly owned subsidiary) from
Real Estate Properties Limited Partnership (formerly
Fred Meyer Real Estate Properties, Ltd.) with appendices
containing certain nonstandard provisions contained in
the Lease Agreement. Incorporated by reference to
Exhibit 10J to the Company's Annual Report on Form 10-K
for the year ended January 31, 1987 (File No. 0-15023).
Appendices containing certain additional nonstandard
provisions. Incorporated by reference to Exhibit 10J to
the Company's Annual Reports on Form 10-K for the years
ended January 28, 1989, February 3, 1990, and
February 2, 1991 (File No. 0-15023). Certain lease
modifications for Burien, Washington facility.
Incorporated by reference to Exhibit 10K to the
Company's Annual Report on Form 10-K for the year ended
January 30, 1993. Second Lease Modification Agreement
for Cornelius store, dated as of August 16, 1994; and
Second Lease Modification Agreement for Fairbanks store,
dated as of March 18, 1994.
10K Form of Sublease, dated May 1, 1984, Fred Meyer Real
Estate Properties, Ltd. (now Real Estate Properties
Limited Partnership), Lessor to Fred Meyer, Inc., Lessee
for the Stadium Parking Lot. Incorporated by reference
to Exhibit 10J(6) to the Company's Registration
Statement on Form S-1, Registration No. 33-8574.
10L Form of Sublease, dated May 1, 1984, Fred Meyer Real
Estate Properties, Ltd. (now Real Estate Properties
Limited Partnership), Lessor to Roundup Co., Lessee for
Photo Plant Parking Lot. Incorporated by reference to
Exhibit 10J(7) to the Company's Registration Statement
on Form S-1, Registration No. 33-8574.
10M Lease Agreement, dated October 22, 1986, including
Amendment, dated April 30, 1987, between Fred Meyer Real
Estate Properties, Ltd. (now Real Estate Properties
Limited Partnership), and Roundup Co. for Midway store.
Incorporated by reference to Exhibit 10N to the
Company's Annual Report on Form 10-K for the year ended
January 31, 1987 (File No. 0-15023).
10N Lease Agreement, dated February 1, 1990, relating to
additional property adjacent to Oak Grove store location
between REC Resolution Co. as successor in interest to
Vanoak Corporation, Lessor, and Fred Meyer, Inc.,
Lessee. Incorporated by reference to Exhibit 10P to the
Company's Annual Report on Form 10-K for the year ended
February 2, 1991 (File No. 0-15023).
10O Lease Agreement, dated February 19, 1987, including
Addendum, dated September 16, 1987, between Fred Meyer,
Inc., as Lessee, and REC Resolution Co. as successor in
interest to Duane Company, as Lessor, for the Gateway
store. Incorporated by reference to Exhibit 10Q to the
Company's Annual Report on Form 10-K for the year ended
January 30, 1988 (File No. 0-15023). Addendum No. 2 to
Lease Agreement. Incorporated by reference to Exhibit
10Q to the Company's Annual Report on Form 10-K for the
year ended February 2, 1991 (File No. 0-15023).
10P Lease Agreement, dated December 12, 1988, between Fred
Meyer, Inc., as Lessee, and REC Resolution Co. as
successor in interest to Fifth Avenue Corporation, as
Lessor, for the Burlingame store. Incorporated by
reference to Exhibit 10S to the Company's Annual Report
on Form 10-K for the year ended January 28, 1989 (File
No. 0-15023).
10Q Lease Cancellation Agreement between the Company and
Real Estate Properties Limited Partnership, regarding
termination of the lease of the photo plant facility,
dated as of January 17, 1995.
10R Lease for Swan Island Parking Lot between the Company as
lessee and Real Estate Properties Limited Partnership as
lessor, dated November 16, 1994.
10S Lease Assignment Agreement between Real Estate
Properties Limited Partnership (REPL) as assignor, and
the Company as assignee, dated as of March 14, 1995,
pursuant to which the Company has agreed to purchase the
leasehold interest of REPL in the Hawthorne, Hazel Dell
and Raleigh Hills stores; and a related Real Estate
Purchase and Sale Agreement between REC Resolution Co.
as seller and the Company as purchaser, dated as of
March 14, 1995, pursuant to which the Company has agreed
to purchase the fee interest of REC Resolution Co., (an
affiliate of REPL) in the Hawthorne, Hazel Dell and
Raleigh Hills stores.
11 Computation of Earnings per Common Share.
13 Portions of the Annual Report to Shareholders of the
Company for the year ended January 28, 1995 are
incorporated by reference herein.
21 List of Subsidiaries. Incorporated by reference to
Exhibit 21 to the Company's Annual Report on Form 10-K
for the year ended January 29, 1994.
23 Consent of Deloitte & Touche LLP.
24 Powers of Attorney.
27 Financial Data Schedule.
- --------------
* This exhibit constitutes a management contract or compensatory
plan or arrangement.
(b) Reports on Form 8-K.
-------------------
No reports on Form 8-K were filed by the Company during the last
quarter of the year ended January 28, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
FRED MEYER, INC.
Date: April 26, 1995 By KENNETH THRASHER
------------------------------
Kenneth Thrasher,
Chief Financial Officer,
Senior Vice President - Finance
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on April 26, 1995.
Signature Title
--------- -----
(1) Principal Executive Officer
ROBERT G. MILLER Chairman of the Board
- ------------------------------ and Chief Executive Officer
Robert G. Miller
(2) Principal Financial Officer
KENNETH THRASHER Chief Financial Officer,
- ------------------------------ Senior Vice President - Finance
Kenneth Thrasher
(3) Principal Accounting Officer
THOMAS R. HUGHES Vice President and Controller
- ------------------------------
Thomas R. Hughes
(4) Directors
* JEROME KOHLBERG, JR. Director
- ------------------------------
Jerome Kohlberg, Jr.
* PAUL E. RAETHER Director
- ------------------------------
Paul E. Raether
* SAUL A. FOX Director
- ------------------------------
Saul A. Fox
* MICHAEL W. MICHELSON Director
- ------------------------------
Michael W. Michelson
* ROGER S. MEIER Director
- ------------------------------
Roger S. Meier
* A.M. GLEASON Director
- ------------------------------
A.M. Gleason
* By KENNETH THRASHER
-------------------------
Kenneth Thrasher
As Attorney in Fact
EXHIBIT INDEX
Sequential
Exhibit Page
Number Number
- ------- ----------
3A Restated Certificate of Incorporation of Fred Meyer,
Inc. Incorporated by reference to Exhibit 3A to the
Company's Registration Statement on Form S-1,
Registration No. 33-8574.
3B Amended and Restated Bylaws of Fred Meyer, Inc.
Incorporated by reference to Exhibit 4B to the Company's
Registration Statement on Form S-8, Registration
No. 33-49638.
4A Specimen Stock Certificate. Incorporated by reference
to Exhibit 4C to the Company's Registration Statement on
Form S-3, Registration No. 33-67670.
4B Credit Agreement dated as of June 30, 1994, among Fred
Meyer, Inc., various banks named therein, and Bank of
America as Agent.
4C Term Promissory Notes in an original aggregate principal
amount of $70,000,000, including the Intercreditor
Agreement dated June 29, 1993 among the Company, and
various banks and financial institutions named therein.
Incorporated by reference to Exhibit 4E to the Company's
Registration Statement on Form S-3, Registration
No. 33-67670.
4D Note agreement dated as of June 1, 1994, in an original
aggregate principal amount of $57,500,000, among Fred
Meyer, Inc., and various life insurance companies.
4E Credit Agreement dated as of March 6, 1995, among Fred
Meyer, Inc., various financial institutions named
therein, and The Bank of Nova Scotia as Agent.
*10A-1 Fred Meyer, Inc. 1983 Stock Option Plan, as amended.
Incorporated by reference to Exhibit 10D to the
Company's Annual Report on Form 10-K for the year ended
January 28, 1989 (File No. 0-15023).
*10A-2 Fred Meyer, Inc. 1990 Stock Incentive Plan, as amended.
Incorporated by reference to Exhibit 28 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
August 18, 1990 (File No. 0-15023).
*10B Fred Meyer, Inc. Bonus Plan Description, as amended.
10C Assumption Agreement and Unconditional Guaranty of
Certain Obligations, dated December 11, 1981, among Fred
Meyer, Inc., The Predecessor Company, DTC Acquisition
Corporation, and Real Estate Properties Limited
Partnership (formerly Fred Meyer Real Estate Properties,
Ltd.). Incorporated by reference to Exhibit 10FF to the
Company's Registration Statement on Form S-1,
Registration No. 2-87139.
*10D Non-Employee Directors Stock Compensation Plan, adopted
November 17, 1992. Incorporated by reference to Exhibit
10F to the Company's Annual Report on Form 10-K for the
year ended January 30, 1993.
*10E Form of contract for Senior Executive Long-Term
Disability Program. Incorporated by reference to
Exhibit 10G to the Company's Annual Report on Form 10-K
for the year ended January 30, 1993.
*10F Fred Meyer Supplemental Income Plan dated January 1,
1994. Incorporated by reference to Exhibit 10H to the
Company's Annual Report on Form 10-K for the year ended
January 29, 1994.
*10G Employment Agreement between Fred Meyer, Inc. and
Robert G. Miller, as amended by Amendment No. 1.
*10H Indemnity Agreement. Incorporated by reference to
Exhibit 10I to the Company's Registration Statement on
Form S-1, Registration No. 33-8574.
10I Form of Lease Agreement for substantially identical
leases covering 36 stores and other locations leased by
Fred Meyer, Inc. (or a wholly owned subsidiary) from
Real Estate Properties Limited Partnership (formerly
Fred Meyer Real Estate Properties, Ltd.) including form
of Assignment of Master Lease wherein Fred Meyer Real
Estate Properties, Ltd. (now Real Estate Properties
Limited Partnership) assigned its interest to
Metropolitan Life Insurance Company and a First
Amendment to Lease Agreement, dated November 25, 1986,
with appendices containing certain nonstandard
provisions of the Lease Agreement and the First
Amendment; Collateral Matters Agreement and
Indemnification Agreement, each dated November 25, 1986,
between Fred Meyer, Inc. and Metropolitan Life Insurance
Company. Incorporated by reference to Exhibit 10I to
the Company's Annual Report on Form 10-K for the year
ended January 31, 1987 (File No. 0-15023). Memorandum
of First Amendment to Lease Agreement, dated March 6,
1987, between Metropolitan Life Insurance Company
("Metropolitan"), Landlord and Fred Meyer, Inc., Tenant;
and Assignment of Master Lease, dated March 6, 1987,
between Real Estate Properties Limited Partnership
(formerly Fred Meyer Real Estate Properties, Ltd.)
(Assignor) and Metropolitan (Assignee) for Nampa, Idaho.
Incorporated by reference to Exhibit 10I to the
Company's Annual Report on Form 10-K for the year ended
January 30, 1988 (File No. 0-15023).
10J Form of Lease Agreement for substantially identical
leases covering 27 stores and other locations subleased
by Fred Meyer, Inc. (or a wholly owned subsidiary) from
Real Estate Properties Limited Partnership (formerly
Fred Meyer Real Estate Properties, Ltd.) with appendices
containing certain nonstandard provisions contained in
the Lease Agreement. Incorporated by reference to
Exhibit 10J to the Company's Annual Report on Form 10-K
for the year ended January 31, 1987 (File No. 0-15023).
Appendices containing certain additional nonstandard
provisions. Incorporated by reference to
Exhibit 10J to the Company's Annual Reports on Form 10-K
for the years ended January 28, 1989, February 3, 1990,
and February 2, 1991 (File No. 0-15023). Certain lease
modifications for Burien, Washington facility.
Incorporated by reference to Exhibit 10K to the
Company's Annual Report on Form 10-K for the year ended
January 30, 1993. Second Lease Modification Agreement
for Cornelius store, dated as of August 16, 1994; and
Second Lease Modification Agreement for Fairbanks store,
dated as of March 18, 1994.
10K Form of Sublease, dated May 1, 1984, Fred Meyer Real
Estate Properties, Ltd. (now Real Estate Properties
Limited Partnership), Lessor to Fred Meyer, Inc., Lessee
for the Stadium Parking Lot. Incorporated by reference
to Exhibit 10J(6) to the Company's Registration
Statement on Form S-1, Registration No. 33-8574.
10L Form of Sublease, dated May 1, 1984, Fred Meyer Real
Estate Properties, Ltd. (now Real Estate Properties
Limited Partnership), Lessor to Roundup Co., Lessee for
Photo Plant Parking Lot. Incorporated by reference to
Exhibit 10J(7) to the Company's Registration Statement
on Form S-1, Registration No. 33-8574.
10M Lease Agreement, dated October 22, 1986, including
Amendment, dated April 30, 1987, between Fred Meyer Real
Estate Properties, Ltd. (now Real Estate Properties
Limited Partnership), and Roundup Co. for Midway store.
Incorporated by reference to Exhibit 10N to the
Company's Annual Report on Form 10-K for the year ended
January 31, 1987 (File No. 0-15023).
10N Lease Agreement, dated February 1, 1990, relating to
additional property adjacent to Oak Grove store location
between REC Resolution Co. as successor in interest to
Vanoak Corporation, Lessor, and Fred Meyer, Inc.,
Lessee. Incorporated by reference to Exhibit 10P to the
Company's Annual Report on Form 10-K for the year ended
February 2, 1991 (File No. 0-15023).
10O Lease Agreement, dated February 19, 1987, including
Addendum, dated September 16, 1987, between Fred Meyer,
Inc., as Lessee, and REC Resolution Co. as successor in
interest to Duane Company, as Lessor, for the Gateway
store. Incorporated by reference to Exhibit 10Q to the
Company's Annual Report on Form 10-K for the year ended
January 30, 1988 (File No. 0-15023). Addendum No. 2 to
Lease Agreement. Incorporated by reference to Exhibit
10Q to the Company's Annual Report on Form 10-K for the
year ended February 2, 1991 (File No. 0-15023).
10P Lease Agreement, dated December 12, 1988, between Fred
Meyer, Inc., as Lessee, and REC Resolution Co. as
successor in interest to Fifth Avenue Corporation, as
Lessor, for the Burlingame store. Incorporated by
reference to Exhibit 10S to the Company's Annual Report
on Form 10-K for the year ended January 28, 1989 (File
No. 0-15023).
10Q Lease Cancellation Agreement between the Company and
Real Estate Properties Limited Partnership, regarding
termination of the lease of the photo plant facility,
dated as of January 17, 1995.
10R Lease for Swan Island Parking Lot between the Company as
lessee and Real Estate Properties Limited Partnership as
lessor, dated November 16, 1994.
10S Lease Assignment Agreement between Real Estate
Properties Limited Partnership (REPL) as assignor, and
the Company as assignee, dated as of March 14, 1995,
pursuant to which the Company has agreed to purchase the
leasehold interest of REPL in the Hawthorne, Hazel Dell
and Raleigh Hills stores; and a related Real Estate
Purchase and Sale Agreement between REC Resolution Co.
as seller and the Company as purchaser, dated as of
March 14, 1995, pursuant to which the Company has agreed
to purchase the fee interest of REC Resolution Co., (an
affiliate of REPL) in the Hawthorne, Hazel Dell and
Raleigh Hills stores.
11 Computation of Earnings per Common Share.
13 Portions of the Annual Report to Shareholders of the
Company for the year ended January 28, 1995 are
incorporated by reference herein.
21 List of Subsidiaries. Incorporated by reference to
Exhibit 21 to the Company's Annual Report on Form 10-K
for the year ended January 29, 1994.
23 Consent of Deloitte & Touche LLP.
24 Powers of Attorney.
27 Financial Data Schedule.
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* This exhibit constitutes a management contract or compensatory
plan or arrangement.