Haggen files for bankruptcy

September 9, 2015

Haggen 2Grocery chain Haggen has filed for bankrupty following a troubled expansion into new locations, including the Central Coast.

The Washington-based supermarket chain filed Tuesday for Chapter 11 bankruptcy protection. Chapter 11 bankruptcy would allow the company to reorganize its business and assets, in addition to restructuring its debt.

Haggen filed for protection in a federal bankruptcy court in Delaware. The grocer listed more than a dozen creditors in the bankruptcy filing, and it claims to owe them about $14.8 million.

Haggen also said it has received commitments of up to $215 million in financing from existing lenders in order to keep its operations running.

In Dec. 2014, Haggen bought 146 Albertsons, Vons, Pavilions and Safeway stores. Before the purchase, it operated just 18 stores.

The Washington grocer purchased the 146 stores after federal regulators ordered Albertsons and Safeway to sell locations as part of a merger.

Shortly after Haggen took over the stores, prices increased and some of the previously stocked items were no longer available. Many of the stores’ customers left.

Last month, Haggen announced plans to close 27 stores. It previously laid off workers while cutting the salary and benefits of others. Dozens of Central Coast workers have lost their jobs since Haggen took over the grocery stores.

Earlier this month, Haggen sued Albertsons seeking more than $1 billion in damages. The suit followed a lawsuit Albertsons filed against Haggen in July.

Haggen accuses Albertsons of providing false, misleading and incomplete retail pricing data, causing Haggen to unknowingly inflate prices. The grocer also alleges Albertsons deliberately understocked certain items and overstocked perishable items.

Haggen claims Albertsons’s actions led to the bankruptcy filing.

In its lawsuit, Albertsons alleges Haggen failed to pay for more than $36 million for merchandise that was included in the sale.

Haggen CEO John Clougher said in a news release Tuesday that Chapter 11 bankruptcy is the best way for Haggen to preserve value for stakeholders.

“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,” Clougher said.

Inline Feedbacks
View all comments

Long story short, Albertsons unloaded all of the terrible or weak performing stores and Haggen could not get them to work (i.e. make money). The Florida investor(s) who bankrolled the $300M must be feeling the heat. Better hope that billion-dollar lawsuit against Albertsons pans out to something (settled?).

sounds about right. caveat emptor!

Just wait and see! This is a typical vulture capitalist ploy to shed union agreements, including all the agreements that were part of the sale stating they’d keep employees employed and pay them the same as Albertson’s and Vons. More money grubbing rich investors taking it out on the working class.

Really? How could that possibly be profitable for Haggen? Spend millions and then close down the stores? I don’t like them, and don’t like their stores, but really!?!?!

Maybe time to fire the mergers and acquisitions department and whoever was in charge of reviewing the financials and contracts of the acquired companies. What a disaster.

Haggen expanded too quickly with too many stores. It would be nice if we could get a Winco in Paso Robles.

Please, please, please let Foods Co., Winco or Vallarta Markets open in the Haggen’s locations! Let’s get some real competition going in SLO County.

Well, now I suspect every last Haggen’s in the county will close. Ouch!

QOL going down around here.