Haggen explores sale of all remaining assets

Haggen explores sale of all remaining assets
Shoppers leaving Barkley Village Haggen on Wednesday, Sept. 9. [Oliver Lazenby photo | The BBJ]

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Filed on 10. Nov, 2015 in Business Briefs, Features, News

This story was updated at 5:30 on Nov. 10.

Haggen Food & Pharmacy took steps toward selling every last one of its stores, including profitable stores it has owned for decades.

The Bellingham-based grocer has asked for court approval to allow an auction even of its “core stores” — the 37 successful Northwest stores around which the bankrupt company had previously planned to reorganize. The auction would be Jan. 8.

Haggen needs court approval for the auction since it is operating with financing from creditors.

A company spokesperson said the motion to hold an auction is part of the bankruptcy process.

“As part of the restructuring process, Haggen was required to explore potential outside opportunities for all of its operations, including the core stores which are performing well,” the company spokesperson said in an email. “The bid procedures filed today comply with those terms. Despite the filing, Haggen does not anticipate any changes to continuing operations at the core stores including regular payments to suppliers and partners.”

She declined to explain further or clarify whether this means the company plans to stay in the grocery business.

The court will consider Haggen’s request at a Dec. 4 hearing at U.S. District Bankruptcy Court in Delaware.

Haggen has already began marketing the core stores, according to the court document. It’s looking for a stalking horse bidder for the stores but hasn’t found one yet. Stalking horse bids are common in bankruptcies and allow the seller to pick an initial bidder. The two parties agree to terms beforehand, keeping lowball bids off the table.

The grocer closed 27 stores this fall. This week, Haggen is auctioning 100 stores from a second phase of store closures. Haggen has five stores and a pharmacy in Whatcom County.

Haggen purchased 146 stores from Albertsons and Safeway earlier this year when those two chains merged. Haggen grew from 18 locations with 2,000 employees in the Northwest to 164 stores with more than 10,000 employees across the West Coast. But problems quickly popped up and, by this summer, the chain had filed for chapter 11 bankruptcy.

As Haggen looks to shed many of its stores, Albertsons has come to take its locations back.
Albertsons is now the baseline bidder for 36 of the stores that went to auction Monday. The large chain is bidding on stores in Washington, Oregon and Arizona. Albertsons used to own many of the Haggen stores it’s bidding on.

Albertsons was forced to sell the stores last year by the Federal Trade Commission when it merged with Safeway due to concerns that the merger would result in a lack of competition for the chain.

It’s not clear whether Albertsons would be able to buy stores back from Haggen.

The FTC would review any store purchase by Albertsons in the areas where it ordered the company to divest stores last year, Dan Ducore, assistant director of the FTC’s Bureau of Competition, said in August.

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IFRoZSBKb3VybmFsPC9saT48L3VsPg==