Haggen to sell remaining grocery stores
And then there were none.
Albertsons plans to purchase 29 of 32 Haggen’s “core stores” in Oregon and Washington for a “base amount” of about $106.2 million, according to a March 11 bankruptcy filing. Haggen plans to sell its three remaining locations over the next 60 days.
In less than a year and a half, the Bellingham, Wash.-based grocery chain will likely go from 164 stores to zero.
Haggen announced its plan to acquire 146 stores in December 2014, including 20 tri-county locations, paving the way for the $9.2 billion Albertsons and Safeway merger. Federal regulators hoped the massive acquisition would create a competitive landscape. It proved to be too big of an undertaking for the grocer that started with 18 stores.
When all is said and done, Albertsons will end up with the bulk of the stores it divested.
“We committed to this acquisition because we knew we had the experience, talent and drive to get it done,” said John Caple in a Dec. 19, 2014 news release. Caple is the chairman of the Haggen board of directors and partner at Comvest Partners, a private investment firm that owns the majority of shares of Haggen. “The strength of our management and store support teams, combined with the talent of the store teams at each of the new store locations, will enable Haggen to be a successful West Coast grocer.”
The chain struggled when it entered the California, Nevada and Arizona markets. Haggen laid off workers, didn’t stock staple items or sell them for competitive prices.
The company filed for Chapter 11 bankruptcy on Sept. 8 in an effort to reorganize. Its lenders offered $215 million in debtor-in-possession financing to try to salvage its existing operations.
Haggen then decided to close and auction the vast majority of its stores so it could focus on its core locations in Washington and Oregon. Yet, the company announced in November that is was testing the market for its core locations as well.
Several chains have since snatched up former Haggen stores including Sprouts Farmers Market, Super A Foods, Stater Brothers, Smart & Final, Vons and Gelson’s.
The colossal collapse has led to the criticism of Haggen’s upper management as well as the Federal Trade Commission, the agency that OK’d the deal.
A Delaware bankruptcy court must approve the pending Albertsons purchase. The court plans to review the sale on March 29.
The recent announcement may spell the end for Haggen, which was founded in 1933.
• Contact Alex Kacik at [email protected].
