Haggen has agreements to sell 36 Southwest stores

Haggen announced Monday that it has signed purchase agreements for 36 of its stores in the Southwest.

Gelson’s Market, a high-end regional supermarket chain, signed a purchase agreement for eight Haggen stores in California. Smart & Final, a warehouse-house style food and supply chain agreed to buy 27 stores in California and one in Nevada, Haggen said in a statement.

The sales, which are subject to court approval, are “stalking horse” bidder packages. 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 agreement is subject to court approval.

As part of its chapter 11 bankruptcy proceedings, the struggling Bellingham grocer also asked U.S. District Court in Delaware for a hearing on Oct. 19 to consider bidding procedures for the rest of its closing stores. In total, Haggen plans to close or sell 137 stores.

Haggen acquired 146 grocery stores earlier this year and quickly started losing money at most of its new stores.

The company previously planned to liquidate the stores slated for closure. On Sept. 24, Haggen said in bankruptcy filings that other companies were not likely to make a firm offer on its closing stores.

The United Commercial Workers Union, which represents the majority of Haggen workers, welcomed the news.

The union has pushed Haggen to consider selling stores to union operators, said Kathy Finn, director of collective bargaining for Los Angeles-based UFCW Local 770.

Finn is pleased that Gelson’s may buy some stores, as the grocer has a strong relationship with the union, she said.

Gelson’s operates 18 stores in Southern California and is known for high-quality meat and produce, according to its website.

Smart & Final, the other potential buyer, is a chain of warehouse-style food and supply stores. The company operates more than 200 stores in California, Oregon, Washington, Arizona, Nevada, Idaho and Mexico. It operates 21 stores in Washington under the Cash & Carry banner.

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