Haggen struggles in California

By Shan Li
September 9, 2015

Supermarket chain Haggen filed Tuesday for Chapter 11 bankruptcy after struggling for months with a huge expansion into new states including California.

The Bellingham, Wash.-based grocer has been floundering since buying 146 Albertsons, Vons, Pavilions and Safeway grocery stores, including 83 in California, mostly in the south. Albertsons and Safeway were ordered by federal regulators to divest those locations as part of their merger.

With one move, Haggen expanded from an 18-store chain in the Pacific Northwest to a regional player all down the West Coast. The company spent the earlier part of the year converting its new stores to the Haggen brand.

But after failing to win over shoppers, Haggen said last month that it would close 27 of its locations. It had already cut worker hours and laid off some employees earlier in the summer.

On Tuesday, the company filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. Haggen said it had received as much as $215 million in financing commitments from its existing lenders to keep its operations running.

John Clougher, chief executive of the grocer, said the company decided that reorganizing under Chapter 11 was “the best way for Haggen to preserve value for all 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 realign our operations to be positioned for the future,” he said in a statement Tuesday.

To read expanded article, click here.