A local supermarket chain tried to grow too fast and are paying the price.
From the Bellingham Herald:
Haggen files for Chapter 11 bankruptcy
Bellingham-based grocer Haggen filed for Chapter 11 bankruptcy protection Tuesday, Sept. 8.
In a news release sent out late Tuesday night, Haggen said the bankruptcy filing was need to help the company reorganize around its core profitable stores. It will also give the company up to $215 million in debtor-in-possession financing options from its existing lenders in order to maintain day-to-day operations.
“After careful consideration of all alternatives, the company concluded that a reorganization through the Chapter 11 process is the best way for Haggen to preserve value for all stakeholders,” said John Clougher, CEO of Haggen, in the news release. “The action we are taking today will allow us to continue to serve our customers and communities while providing Haggen with a process to re-align our operations to be positioned for the future.”
The problem:
The grocer went from a family business to a West Coast power virtually overnight after buying 146 stores from Albertsons in December, growing to a company with 164 stores. The company has struggled in converting many of those stores to the Haggen brand.
The moves comes about a week after Haggen announced it was suing Albertsons Cos. for $1 billion. In its Sept. 1 lawsuit, Haggen alleged Albertsons engaged in “coordinated and systematic efforts to eliminate competition and Haggen as a viable competitor in over 130 local grocery markets in five states.”
Haggen is also facing an Albertsons lawsuit filed in July for fraud, saying the Bellingham-based grocer failed to pay for $41.1 million in inventory.
Clougher's LinkedIn page shows a lot of short positions - a year here, two years there. His longest period of employment was eight years as regional president of Whole Foods in 2002-2010. Wonder how much more damage he will do until he gets booted from Haggens. I am sad because Haggens is my favorite place to shop (except for Crossroads of course). Their prices are reasonable, good quality and great staff.
Haggens bought 3 stores in Tucson and closed 2 of them about 60 days after acquisition.