Haggen files Chapter 11, parts ways with top executive
Haggen files Chapter 11, parts ways with top executive
Retail operator Haggen filed for Chapter 11 bankruptcy protection in Delaware Sept. 8 and announced that it has parted ways with the executive it hired in December to lead its expansion plans.
The Bellingham, WA-based retail chain made headlines earlier this year when it took over 146 stores in California, Nevada and Arizona from Albertsons and Safeway as those large grocers were undergoing a merger. The additional locations joined Haggen’s 18 units in the Pacific Northwest and were a bid to become a major player in the Southwest.
More recently, Haggen filed a $1 billion lawsuit against Albertsons, alleging the latter provided inaccurate pricing information causing Haggen to charge customers higher prices and hampering its effort to break into the new market.
In the filing in U.S. Bankruptcy Court in Delaware, Haggen said it owes $52 million to dozens of suppliers, including Charlie’s Produce, which has set up a division in Southern California to better service the account.
“After careful consideration of all alternatives, the company concluded that a reorganization through the Chapter 11 process is the best way for Haggen to preserve value for all stakeholders,” John Clougher, chief executive officer, said in a Sept. 8 statement. “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.”
Haggen also announced that Bill Shaner, who was hired in December as co-CEO to lead the Southwest Division, is no longer with the company.
Haggen said in the Chapter 11 filing that lenders have committed $215 million to continue operating the stores as the chain sells some of the locations. It did not specify how many or which stores would be sold but said it would focus on core profitable locations and that it is in talks to sell “many of the company’s remaining assets.”
