By Emily Hamann
The Bellingham Business Journal
It looks like things will be almost the same. Almost.
Albertsons laid out on Monday what will happen if its purchase of 29 Haggen Food & Pharmacy’s stores is approved.
Fifteen of the stores will remain under the Haggen brand. The other 14 stores across Washington and Oregon will be converted to Albertsons.
“Haggen’s original core group of Pacific Northwest stores set the gold standard in the markets they serve for quality fresh products and exceptional service,” said Bob Miller, Albertsons chairman and CEO, in a statement. “We are proud to now be associated with this tradition.”
During the switch, Albertsons says it will honor existing labor agreements and hire substantially all employees to staff the stores.
The stores that will remain Haggen include 14 that have always been under the banner of the Bellingham-based grocer, including five in Whatcom County, two in Skagit County and four in Snohomish County.
One store in Oak Harbor — which was originally a Safeway but was bought by Haggen last year — will remain under the Haggen banner as well.
“We are excited about the opportunity to have the backing of Albertsons and look forward to be part of the Albertsons grocery family,” said Haggen CEO John Clougher, in a statement.
Haggen announced on Friday that it reached a $106-million deal with the Boise, Idaho-based Albertsons to buy 29 of Haggen’s remaining 32 stores was announced Friday. The other three stores in Puyallup, Port Angeles and Oregon City, Oregon, will be shut down and their workers laid off.
The deal still must be approved by U.S. Bankruptcy Court in Delaware.
Under the proposed plan, the Haggen stores would operate separately from Albertsons, in a business unit that would still be based in Bellingham, where the chain started more than eight decades ago.
“They’re trying to convert as much goodwill and name equity as possible,” said Tisha Oehmen, a partner with Paradux Media Group, a marketing agency based in southern Oregon.
“The stores that have historically been Haggens have goodwill in those communities,” she said. Likewise with stores that have historically been Albertsons or Safeways, or other brands under the Albertson’s banner.
“It’s all about name recognition,” she said. “If I grew up in a community where Haggen has been my grocery store in the past, there’s no reason to change that going forward.”
A press release from Albertsons says that antitrust clearance for the sale was approved last week. Getting that clearance might also be why Albertsons is keeping Haggen headquartered in Bellingham, Oehmen said.
Although Haggen will be run from a separate office, Oehmen was doubtful that all the Haggen stores will stay exactly as they are.
“The reality of almost all mergers is that there will be changes,” she said. “They probably don’t get to operate autonomously.”
University of Washington professor David Sirmon said there are a few different strategies to have during a merger. One in which both companies try to retain their own culture is “the hardest type of integration to pull off,” he said.
This is just the latest news in the Haggen-Albertsons relationship. A year ago, Albertsons was forced to sell off 168 of its stores before the Federal Trade Commission would approve its $9.4 billion merger with Safeway.
Haggen bought most of those stores. It all went downhill for Haggen from there. It started closing or selling off its new stores. By last fall, it had filed for bankruptcy.
Haggen’s remaining “core” stores were set to be sold at auction, originally scheduled for January. The date was pushed back many times.
Sirmon said that most likely the delays were to allow more time to drum up additional bidders. Without more interest, this was probably Haggen’s best option, Sirmon said.