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Wegmans Food Markets

 
Gale Directory of Company Histories:

Wegmans Food Markets, Inc.

Type: Private Company
Address: 1500 Brooks Avenue, Rochester, New York 14603-0844, U.S.A.
Telephone: (716) 328-2550
Fax: (716) 464-4664
Web: http://www.wegmans.com
Employees: 28,500
Sales: $2.75 billion (1999)
Incorporated: 1931
NAIC: 44511 Supermarkets and Other Grocery (Except
SIC: 5411 Grocery Stores

Wegmans Food Markets, Inc. is a privately held, family-run corporation that operates a regional supermarket chain of approximately 60 Wegmans stores, in addition to 17 Chase-Pitkin Home and Garden stores. Known for its innovative approach to grocery retailing, Wegmans is consistently cited as one of the nation's top retailers and best places to work. With headquarters in Rochester, New York, Wegmans operates primarily in the central and western parts of New York. In the 1990s the chain expanded into Pennsylvania and New Jersey.

Wegmans was founded as the Rochester Fruit and Vegetable Company in 1916, a small food store run out of the front of the Wegman family's house in Rochester. After six years of selling groceries from home, brothers Walter and John Wegman moved their enterprise to a small, full-scale grocery store featuring canned goods, produce, a bakery, and even a cafeteria.

The two brothers became known as innovators in the grocery business, and in the early 1930s, they opened a self-service grocery, a new concept that would revolutionize food shopping. The new store was incorporated in 1931 as Wegmans Food Markets, Inc. The Wegmans store became a successful operation as well as a tourist attraction, featuring self-service and several other innovations, including vaporized water spray for vegetables and fruits, refrigerated food display windows, homemade candy, and a cafeteria that seated 300 people.

In 1950, Robert Wegman, son and nephew of the founders, became president of Wegmans stores, and the company began to invest in businesses that would enhance its central focus. Wegman acquired an egg farm and developed an on-site meat processing center and a central bakery. He also formed Wegmans Enterprises, Inc. to handle real estate development, leasing, and property management for the company. In 1969 he was named chairman and CEO of Wegmans, and the company expanded outside of Monroe County, building stores in Syracuse, New York.

The 1970s brought new 40,000-square-foot stores that were intended to incorporate the "mall in a store" concept. These new stores included gift cards, floral products, and pharmaceutical departments and were open 24 hours. Wegmans also became only the third chain in the country to use electronic cash registers, installing an optical scanner system in a Rochester store in 1972.

In 1973, Robert Wegman capitalized on the growing demand for do-it-yourself home improvement products, opening his Home Improvement Center next to one of the company's Rochester groceries. The following year, Wegmans purchased Bilt-Rite Chase-Pitkin, Inc., a retail operation that sold lumber, hardware, millwork, garden and landscape materials, and building supplies. Wegmans soon began expanding this chain, building Chase-Pitkin stores next to existing Wegmans stores. Robert Wegman's son Danny assumed the presidency of Wegmans in 1976.

The company began carrying its own store brand items in 1979, and the line became so popular that by the early 1990s, Wegmans was carrying 1,000 items under its own brand name, including a line of soda. In 1983 Wegmans became one of the first chains to install automated teller machines connected to local banks. The ATMs were profitable for the store because Wegmans owned the machines and charged fees to the bank for providing all the front-line services, including replenishing cash and receipt forms. Other developments included the 1986 establishment of the Wegmans Federal Credit Union for company employees. Four years later, the company opened one of the first child care services offered by a private company with its Wegmans Child Development Center in the town of Greece, New York.

Wegmans prided itself on its contributions to the communities in which it operated, noting its donations of damaged packaged goods and perishables to local food banks as well as its sponsorship of local events, donations of foods to charitable activities, and contributions to community projects. Wegmans has been nationally recognized several times throughout its history.

In 1987, Fortune magazine named Wegmans the best U.S. supermarket in terms of customer service. In 1991, Wegmans' Work-Scholarship program was awarded a "Points of Light Award" by President George Bush. The company, one of only two supermarket businesses, was also listed in the 1993 publication of The 100 Best Companies to Work for in America. Wegmans' entry in this list was based on the company's child and development center, medical and vacation benefits for part-time workers, scholarship program and Work-Scholarship Connection, job security, and opportunities for promotion.

Wegmans received the American Business Press competition, "Points of Light," for its community service through its Work-Scholarship Connection program. Started in 1987, the program helped mostly 14- and 15-year-old children at risk of dropping out of school. The store gave these participating students part-time jobs and assigned a mentor to each of them. The mentor, an adult co-worker, helped the student on the job and with schoolwork. Students who stayed on the job and stayed in school to graduate from high school also earned a $5,000 college scholarship to the school of his or her choice.

Nevertheless, Wegmans has had its share of controversy and critics. The company came under attack from consumer groups as well as the New York State Attorney General's office for its alleged refusal to adhere to the state's item pricing laws. Wegmans' violations of state item pricing laws dated back to 1986, but the company argued that item pricing increased consumer costs because of the expense of pricing each item. Wegmans continued to stand by its electronic scanner pricing, claiming it was more accurate than price stickers and refused to pay fines levied against it for violations of the unit pricing regulations. Wegmans won the Attorney General's lawsuit, and the item pricing law in question subsequently expired in 1991.

Wegmans also faced protests from environmental groups when it launched a campaign to decrease paper bag use in favor of plastic. Environmentalists claimed that Wegmans was misleading the public with its claim that plastic bags were better for the environment than paper bags. The critics argued that for Wegmans the main issue was cost: paper bags cost $41 per thousand while plastic cost $18.50 per thousand. According to Wegmans, however, paper bags did not disintegrate in modern dumps any more quickly than plastic, and production of plastic was more energy and resource efficient. Wegmans finally responded to protests by letting each customer decide how he or she wanted purchases bagged. Furthermore, the company established bins for customers to deposit plastic bags for recycling, as part of a trial program with Mobil Chemical Company for recycling plastic. Wegmans also began using paper bags made from recycled paper.

Wegmans also felt criticism commonly directed at companies that experience periods of growth and operation expansion. The needs of the company, it was felt, in some cases conflicted with the needs and interests of local residents when Wegmans sought to enlarge existing stores, requiring the purchase of surrounding properties and development of new traffic control patterns.

By 1993, the largest Wegmans stores were 120,000 square feet, three times the size of the "mall-in-a-store" facilities established 20 years earlier. New Wegmans superstores included cafes with Chinese food, pizza and pasta bars, as well as cappucino and coffee bars. Wegmans promoted itself as a strong advocate of health and nutrition, launching a series of bulletins called "Strive for Five," prepared by a registered dietician and featuring information and recipes for fruits and vegetables. Furthermore, in the early 1990s, Wegmans launched a line of diet foods, called "Just Help Yourself," featuring frozen, prepackaged meals comparable to those offered by diet centers.

In 1993 Wegmans opened its first store outside of New York State, choosing nearby Erie, Pennsylvania. Over the next five years the chain would move eastward, adding five more stores, the last of which was located in Allentown, Pennsylvania. Wegmans appeared as if it was poised to enter the affluent suburbs of Philadelphia. Instead, the chain moved into the New Jersey market, opening a store in West Windsor Township just south of Princeton in 1999. The following year, the chain opened a store in Bridgewater, New Jersey. It also announced plans for a third unit, this one to be located in the upscale Monmouth County bedroom community of Manalapan, an hour-and-a-half south of Manhattan. Monmouth and Ocean counties, with their populations in excess of one million and annual household income of more than $48,000, appeared to be the perfect market in which to spread the Wegmans' concept.

During the 1990s Wegmans replaced older stores with new facilities and constantly adjusted their offerings in accordance to customer feedback. Wkids Fun Center opened in stores to provide supervised child care while parents shopped. The chain added to their list of private label products, offering phone cards, packaged bread, cereal, frozen family meals, as well as vitamins, minerals, and herbs. Wegmans was especially responsive to the baby boomer market that was becoming more health conscious, bolstering not only its offering of product lines but health-related books, magazines, and yoga videos as well. Wegmans also introduced sushi bars to many of the Market Cafes in its stores. In 1999 it opened a highly popular French patisserie in its flagship store, created in large measure by president Danny Wegman's daughter, Nicole.

Wegmans and its efforts were recognized by major publications. In 1998 it was ranked number 16 by Fortune magazine (using the authors of the 1993 book) as one of the "100 Best Companies to Work for in America." While the industry average employee turnover rate was 16.7 percent a year, Wegmans' turnover was only 9 percent. The company would continue to make the top employer list through 2001. According to customers, in a 2000 Consumer Reports survey of supermarket chains, Wegmans ranked second.

However, Wegmans suffered some setbacks in the 1990s. Because of competition from home improvement chains such as Home Depot, the Buffalo-area Chase-Pitkin stores were closed. Wegmans endured a public relations embarrassment in 1997 when it, along with several manufacturers, were sued by the New York State Attorney General's office for colluding to eliminate manufacturers' coupons in Upstate New York, where coupons are more heavily used than in other regions of the country, at great expense to both retailers and manufacturers. Without admitting guilt, Wegmans agreed to settle by paying $500,000.

Wegmans, with its loyal base of customers and unique blend of ambiance, products, and services, has been somewhat immune to competition. Loathe to become so large a chain that management can't keep close tabs on individual stores, Wegmans faced a number of challenges. Mergers in the supermarket industry were creating superchains that commanded tremendous benefits from their economies of scale. Furthermore, grocery products were becoming increasingly more available at drugstore chains and big box discounters like Kmart and Target, which were opening supercenters that included full lines of groceries. In late 2000, the trade journal Supermarket News suggested that Wegmans might be an acquisition target for Kroger or Safeway, or even part of a three-way merger between Virginia-based Ukrop's Supermarkets and North Carolina-based Harris Teeter. Wegmans dismissed all such speculation, intent on remaining independent. Whether the sheer economics of contemporary grocery retailing forecloses that option, however, remained to be seen.

Principal Competitors

Great Atlantic & Pacific Tea Company (A & P); Penn Traffic Company; Safeway Inc.; Wal-Mart Stores Inc.

Further Reading

Khermouch, Gerry, "Wegmans Builds Its Local Base with Private Label," Brandweek, March 8, 1993, p. 23.

Linstedt, Sharon, "Supermarkets Brace for a Good, Old-Fashioned Food Fight," Buffalo News, January 28, 2001, p. P50.

------, "Wegmans May Get Buyout Offer Journal Says," Buffalo News, September 21, 2000, p. E1.

------, "Wegmans, Tops Rated Among Nation's Best Supermarkets," Buffalo News, August 18, 2000, p. C7.

Narisetti, Raju, "P & G Settles with New York over Coupons--Firm, Nine Others Agree to Provide $4.2 Million in Cents-Off Squabble," September 10, 1997, p. A4.

Uttal, Bro, Bill Saporito, and Monci Jo Williams, "Companies That Serve You Best," Fortune, December 7, 1987, p. 98.

"A Winning Day at the White House," Supermarket Business, November 1991, p. 9.

— Wendy J. Stein; Updated by Ed Dinger


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Wegmans Food Markets

Top
Wegmans Food Markets, Inc.
Type Privately held company
Family business
Industry Grocery
Founded Rochester, New York, U.S. (1916 (1916))
Founder(s) John Wegman
Walter Wegman
Headquarters Gates, New York, U.S.
Number of locations More than 75 stores[1]
Area served Mid-Atlantic states
Key people Danny Wegman, Chairman and CEO
Colleen Wegman, President
Revenue increase US$5.15 billion (2009)[2][3][4]
Employees 38,000 (2009)
Website wegmans.com

Wegmans Food Markets, Inc. is a family-owned U.S. regional supermarket chain headquartered in Gates, New York, near Rochester.[5][6] Wegmans has more than 75 stores[1] spread across the mid-Atlantic region, in New York, Pennsylvania, New Jersey, Virginia, Maryland and Massachusetts. Founded in 1916 in Rochester, New York, Wegmans has appeared on Fortune's annual "100 Best Companies to Work For" list since its inception in 1998, and has ranked among the top 10 for eight consecutive years.[7] Food Network recognized it with its award for Best Grocery Store in 2007,[8] and Consumer Reports ranked it the top large grocery chain in the United States in 2009.[9]

Contents

History

Map of Wegmans stores from New York to New Jersey and Virginia (bigger dots for areas with more stores)

Wegmans is a privately owned company, founded in 1916 by John and Walter Wegman as the Rochester Fruit and Vegetable Company. Wegmans is now headquartered in Gates, New York, a suburb of Rochester. Danny Wegman is CEO. His daughter, Colleen Wegman is president, and his other daughter, Nicole Wegman, is vice-president of restaurant operations. His father Robert Wegman, who died in 2006, was chairman. Robert was the son of co-founder Walter Wegman. During his life Robert Wegman distinguished himself as a pioneer in the retail food business, as well as a generous donor to educational institutions and other charities.[10][11]

In 1968, the chain expanded outside the Rochester area for the first time with a store in Syracuse,[12] and again in 1977 with its first Buffalo store.[12] The first store outside New York state opened in 1993 in Erie, Pennsylvania[12] and the expansion continued into New Jersey in 1999,[12] Virginia in 2004, and Maryland in 2005.[12][13] Wegmans, long planning to expand into Massachusetts,[14][15] opened a store in Northborough in 2011[16] and will open another in Burlington in 2013.[17] Wegmans is planning on opening a store at the Montgomery Mall in North Wales, Pennsylvania in 2013, the first store to be located in a shopping mall since the closing of their Midtown Plaza store in Rochester.[18]

Operations

A modern Wegmans storefront circa 2010. This newest center is located in Lanham, Maryland, the second location in the state.
Exterior of a typical Wegmans, in the style common in the late 1990s. Located in Amherst, New York

In 2009, Wegmans ranked number 29 on the Supermarket News list of the Top 75 North American Food Retailers based on sales volume,[19] up from number 32 on the 2007 Supermarket News list,[3] and 7th among privately held U.S. supermarkets.[citation needed] In 2009 Stores Magazine showed it to be the 74th largest retailer in the United States with estimated revenues of $4.67 billion[20] As of 2006, it was the 66th largest privately held company, as determined by Forbes.[21] On Forbes's 2005 list, Wegmans ranked 54th.[22]

Most of Wegmans' newer stores are of the "superstore" or "megamarket" type, with a very large area, a large variety of foods aimed at an upscale market, and in many stores, Market Café in-store dining areas. The company also used to own and operate Tastings, a restaurant at its Pittsford, New York, store that offered diners three distinct eating areas, making the Pittsford Wegmans largest of all.[citation needed] Tastings is now closed, and has been replaced with The Food Bar, a 'seafood shack' styled restaurant in the same space. Next Door Bar and Grill, a stand alone restaurant also operated by Wegmans, is open across the street from the Pittsford store.

In January 2007, Wegmans announced two new business ventures: (1) plans to open a 19,000 sq ft (1,800 m2) liquor store in Pittsford (adding to its two existing wine centers in Virginia and New Jersey); and (2) the creation of a US$28 million "Culinary Innovation Center" (in Chili, New York), a corporate research and development facility that will house a new central kitchen (replacing some of the current operations at its meat center).[23] The liquor store opened in April 2008 under the name of Century Pittsford Wines. It is not owned by the company, but is independently owned by Nicole Wegman due to New York State liquor laws. The store is 45,000 sq ft (4,200 m2)[24][25]

In November 2010, Walgreens filed a trademark infringement lawsuit against Wegmans, claiming the "W" in the Wegman's logo is too similar to its own.[26] The lawsuit was settled in April 2011, with Wegmans agreeing to discontinue use of its "W" logo by June 2012, although the supermarket retains the right to freely use the “Wegmans” name in script.[27] According to Jo Natale, Wegmans director of media relations, “The cost of making relatively minor changes to a limited number of products was much less than the cost of litigating this case to the end,”[28]

Chase-Pitkin Home and Garden Centers

Wegmans was the parent company of Chase-Pitkin, a regional home improvement retailer. On October 4, 2005, Wegmans announced that it would close all Chase-Pitkin stores by early 2006[29] and focus instead on its highly successful supermarket operations. The decision to exit the home improvement business was reportedly due to the increasing dominance of national chains such as Lowe's and The Home Depot.[29] Chase-Pitkin stores closed individually at various points throughout March 2006.

Tobacco products

In January 2008, Wegmans announced that they would no longer sell tobacco products[30] and would offer smoking cessation programs to all employees.[31] The decision drew praise from the American Lung Association of New York State, who presented Wegmans with the "Lung Champion Award".[31]

Wegmans brand

A Wegmans store in Manalapan, New Jersey

Wegmans began branding their own products in 1979 offering basic commodities with a lower price than the national brands. The "Wegmans" brand has gradually expanded. In 1992, it started a line of health products called "Food You Feel Good About."... The next sub-brand to be launched was "Italian Classics." In 1995, Wegmans introduced its imported pastas, canned tomatoes, olive oils, etc. Many of the products are sourced from Italy. In 2002, Wegmans launched its own line of organic products.

The Wegmans House Brand has been used extensively in the American sitcom The Office; the program is set in the city of Scranton, Pennsylvania, which does, in fact, have a Wegmans store.[32][33] It also appears on QVC, the shopping channel.

The house brand prior to "Wegmans" was "Staff".[citation needed]

Several scenes from the movie Eight Legged Freaks were filmed at the Manalapan, New Jersey location.


References

  1. ^ a b "Store Locator". Gates, New York: Wegmans. http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&identifier=CATEGORY_517. Retrieved April 12, 2011. 
  2. ^ www.hoovers.com/company/Wegmans_Food_Markets_Inc/cfhtji-1.html
  3. ^ a b 2007 Top 75 North American Food Retailers
  4. ^ http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?categoryId=281152&storeId=10052&catalogId=10002&langId=-1
  5. ^ "Gates town, Monroe County, New York." U.S. Census Bureau. Retrieved on January 20, 2011.
  6. ^ "Contact Us." Wegmans Food Markets. Retrieved on January 20, 2011. "Wegmans Food Markets 1500 Brooks Avenue PO Box 30844 Rochester, NY 14603-0844 ."
  7. ^ Perry, Kate (January 22, 2009). "Wegmans, Paychex make Fortune list of best employers". Democrat and Chronicle. http://www.democratandchronicle.com/article/20090122/BUSINESS/90122013. Retrieved January 22, 2009. [dead link]
  8. ^ "And the Winner is Wegmans!" (Press release). Wegmans. April 16, 2007. https://www.wegmans.com/webapp/wcs/stores/servlet/PressReleaseDetailView?langId=-1&storeId=10052&catalogId=10002&productId=399613. Retrieved October 22, 2008. 
  9. ^ http://www.democratandchronicle.com/article/20090407/BUSINESS/904070313&referrer=NEWSFRONTCAROUSEL[dead link]
  10. ^ "Dining, cooking, and travel themes of food chain’s new magazine". Valley News. http://www.valleynewsonline.com/news/2001/0203/Business_News/02.html. Retrieved January 12, 2008. [dead link]
  11. ^ "Robert Wegman, 87, Leader in Supermarket Innovations, Dies". The New York Times. Associated Press. April 22, 2006. http://www.nytimes.com/2006/04/22/business/22wegman.html?_r=1&oref=slogin. 
  12. ^ a b c d e "History". Wegmans. http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?categoryId=256611&storeId=10052&catalogId=10002&langId=-1. Retrieved January 1, 2010. 
  13. ^ "Wegmans Company Overview". http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?categoryId=281152&storeId=10052&catalogId=10002&langId=-1. 
  14. ^ "Westwood OKs liquor license for proposed Wegmans". The Patriot Ledger. May 7, 2008. http://www.patriotledger.com/business/x1485832690/Westwood-OKs-liquor-license-for-proposed-Wegmans. Retrieved January 4, 2010. 
  15. ^ Abby Jordan (January 27, 2009). "The Loop in Northborough in the market for a Wegmans". The MetroWest Daily News. http://www.metrowestdailynews.com/news/x1198800850/The-Loop-in-Northborough-in-the-market-for-a-Wegmans. Retrieved January 4, 2010. 
  16. ^ Uek, Kathy (October 17, 2011). "Opening of Northborough Wegmans is a grand affair". MetroWest Daily News. http://www.metrowestdailynews.com/news/x1876835107/Opening-of-Northborough-Wegmans-is-a-grand-affair. Retrieved October 19, 2011. 
  17. ^ Abelson, Jen (June 4, 2011). "Wegmans to build store near Burlington Mall". Boston Globe. http://www.boston.com/business/articles/2011/06/04/wegmans_to_build_store_near_burlington_mall/. Retrieved June 7, 2011. 
  18. ^ DeBree, Crissa Shoemaker (November 17, 2011). "Wegmans' Montgomeryville store the chain's first at a mall". The Intelligencer. http://www.phillyburbs.com/news/local/money/wegmans-montgomeryville-store-the-chain-s-first-at-a-mall/article_323d46a0-d423-5e04-8640-fc274b0420d2.html. Retrieved November 29, 2011. 
  19. ^ "SN's Top 75 Retailers for 2009". Supermarket News. http://supermarketnews.com/profiles/top75/2009-top-75/index1.html. Retrieved January 5, 2010. 
  20. ^ "Stores Top 100 Retailers". Stores.org. July, 2009. http://www.stores.org/pdf/09Top100chart.pdf. Retrieved January 5, 2010. 
  21. ^ "#66 Wegmans Food Markets". Forbes. November 9, 2006. http://www.forbes.com/lists/2006/21/biz_06privates_Wegmans-Food-Markets_MGF0.html. Retrieved January 5, 2010. 
  22. ^ "America's Largest Private Companies". Forbes. November 11, 2005. http://www.forbes.com/2005/11/09/largest-private-companies_05private_land.html. Retrieved November 16, 2006. 
  23. ^ Rand, Ben (January 6, 2007). "Wegmans embarks on 2 local projects". Democrat and Chronicle. http://www.democratandchronicle.com/apps/pbcs.dll/article?AID=/20070106/BUSINESS/701060306. Retrieved January 6, 2007. [dead link]
  24. ^ "Pittsford Plaza – Century Pittsford Wines run independently of Wegmans". http://www.pittsfordplaza.com/News/Article.aspx?id=176. Retrieved June 13, 2008. [dead link]
  25. ^ "Rundown of New York State liquor laws prohibiting wine and liquor sales in grocery stores". http://www.allbusiness.com/retail-trade/food-stores/4478555-1.html. Retrieved June 13, 2008. 
  26. ^ "Walgreens sues Wegmans in logo dispute". The Wall Street Journal. November 6, 2010. http://online.wsj.com/article/AP0d26cbf8d065497781f4dc5f4336a3b3.html. Retrieved November 17, 2010. 
  27. ^ Richard Patterson (April 27, 2011). "Wegmans Settles with Walgreens over War of W’s". Intellectual Property Brief. American University. http://www.ipbrief.net/2011/04/27/wegmans-settles-with-walgreens-over-war-of-w%E2%80%99s/. Retrieved June 9, 2011. 
  28. ^ "Press Release: Wegmans Releases Statement on Lawsuit Resolution". http://www.wegmans.com/webapp/wcs/stores/servlet/PressReleaseDetailView?langId=-1&storeId=10052&catalogId=10002&productId=720935. Retrieved June 9, 2011. 
  29. ^ a b "Wegmans to close all Chase-Pitkins". auburnpub.com. October 5, 2005. http://www.auburnpub.com/news/local/article_a80b2670-7696-52bf-8f1b-c30970206dcd.html?mode=story. Retrieved January 4, 2010. 
  30. ^ James Fink (January 4, 2008). "Wegmans ceasing tobacco sales". Baltimore Business Journal. http://www.bizjournals.com/baltimore/stories/2007/12/31/daily30.html. Retrieved January 4, 2010. 
  31. ^ a b "Wegmans, DeCicco Markets Ditch Cigarettes". consumeraffairs.com. June 2, 2008. http://www.consumeraffairs.com/news04/2008/06/stores_tobacco.html. Retrieved January 4, 2010. 
  32. ^ Fien, Christine Carrie (March 7, 2007). "TV SCENE: Wegmans checks in at 'The Office'". City Newspaper. http://www.rochestercitynewspaper.com/news/articles/TV+SCENE:+Wegmans+checks+in+at++The+Office+/. Retrieved April 12, 2008. 
  33. ^ "Wegmans Locator Detail for Scranton, PA". Wegmans. http://www.wegmans.com/webapp/wcs/stores/servlet/StoreDetailView?langId=-1&storeId=10052&catalogId=10002&productId=347976. Retrieved April 12, 2008. 

External links


 
 

 

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