US grocery chain Haggen to close 100 stores
26 Sep 2015
Struggling grocer Haggen on Thursday asked permission from a bankruptcy court to close 100 stores, the bulk of its ill-starred bid for a West Coast empire, after not being able to find any interested buyers.
The plan represents a rapid retreat from southern California, Arizona and Nevada, where, under its expansion this year the company bought 146 grocery stores from Albertsons and Safeway following their merger.
The targeted closures would see job losses including over 5,000 in the Southwest, and would leave Haggen with only an enlarged version of its historic Pacific Northwest turf.
The brunt of the closings would be borne by California, however 14 stores in Washington were on the list, mostly former Albertsons and Safeways.
According to court filings by Haggen no third party is likely to bid for these stores.
A terse memo given to employees of the Haggen store in Shoreline on Thursday afternoon read ''this store is not part of the ongoing business model'' and was expected to close around 24 November. According to a store employee the memo was read ''verbatim, no emotion, no apology.''
With the closure, Haggen would be left with only 37 stores.
According to the company's press release, the legacy stores had shown strong sales growth in the past year, and the acquired stores it was keeping had proven successful.
The grocer wanted to close the 100 stores as soon as possible as the sites were currently losing $400,000 a day, according to court documents.
Documents also showed liquidating the stores would raise $125.6 million, which Haggen could be used by the company to help pay its debt.
According to a California union official the manner in which Haggen and a private equity investor went about the expansion and withdrawal needed to be questioned.
''Hopefully (they) will be investigated thoroughly by the bankruptcy court and somehow made to be held responsible for this,'' said Greg Conger, president of the United Food and Commercial Workers International (UFCW) Local 324, which represents 800 Southern California Haggen workers, AP reported.
