PROVIDENCE – Arthur T. Demoulas is out as Market Basket’s CEO and president.
The supermarket company's board of directors unanimously voted Tuesday to remove Demoulas after an unsuccessful mediation last week in Delaware with the longtime leader, WCVB-TV ABC 5 reported Wednesday.
“We assure our valued associates and customers that, as we have demonstrated over the past several months, Market Basket will not change its operations, profit-sharing, bonuses or culture, and will continue to offer the best groceries at the lowest prices anywhere in New England – well into the future,” Market Basket Board Chairman Jay Hachigian said in a statement.
The grocery chain has more than 90 stores in Massachusetts, New Hampshire and Maine, and two in Rhode Island, in Warwick and Johnston.
The firing of Demoulas is the latest twist in the family drama surrounding the company, for which Demoulas' three sisters have a controlling share.
Demoulas, who has been with Market Basket for 35 years, was placed on administrative leave on May 28 after the board of directors accused him of planning a companywide work stoppage. At the same time, Demoulas’ daughter Madeline, his son Telemachus and several executives were placed on leave, including Director of Operations Joseph Schmidt and Grocery Director Tom Gordon.
Schmidt and Gordon were fired in July amid claims they were planning a work disruption, according to WCVB. A court order issued in August barred them from company property, though Schmidt and Gordon claimed the chain’s problems were the result of a corporate coup being orchestrated by Demoulas’ three sisters, who control 60% of the company.
Demoulas, who owns 28% of the company, was previously ousted in 2014 by his cousin, Arthur S. Demoulas, who controlled the company. The ouster sparked a consumer boycott and employee walkout. Weeks later, Demoulas and his three sisters took control of the grocery chain.
Through his spokesperson Justine Griffin Wednesday, Demoulas he deeply disappointed that mediation failed despite his very determined efforts to reach a resolution and his passion for the company and his care for the associates remains unchanged.
“Over time, it became clear to us that this was not a good faith effort by the board or his sisters to reach agreement on the issues created by their abrupt actions placing Arthur T. Demoulas, his family and members of his senior management team on leave,” Griffin said. “It is now crystal clear that they had no intention of reinstating Mr. Demoulas.
“As we said on May 28, the Board’s actions are a farcical cover up for a coup. The so-called investigation was designed from the start to falsely tarnish the reputation of Mr. Demoulas and his leadership team. Mediation has now demonstrated that to be true,” Griffin said.
Lt. Gov. Sabina Matos on Wednesday stressed the importance that Market Basket remain family owned.
“I am hopeful that, despite the change in leadership, Market Basket will not make the mistake of allowing private equity a foot in the door to harm the Rhode Islanders who shop and work at their stores,” Matos said. “Every business, big or small. Over half the businesses in our state are owned by a Rhode Islander over 55 years of age. We need to do more to support business owners in exploring their available paths to successfully exit a business without shuttering it or selling it to a billionaire, such as employee ownership.”
(UPDATE: Comment from Matos added in 12th and 13th paragraphs.)
