Haggen wants to close 100 stores in Bankruptcy and abandon the Southwest

[XDCX]

Haggen, a small grocery chain based in the Seattle area, wants to close 100+ stores as part of its bankruptcy and plans to abandon all of their stores in the Southwest. For the full news report - click here

Now you might be wondering, is this site becoming GroceryStoreForum.com? Why would anyone here care about a small grocery chain in Seattle?

One word - Cerberus.

That's right, the same "patriots" who planned to rescue Chrysler from Daimler have their fingerprints all over the Haggen bankruptcy.

The short story is Cerberus bought the Safeway Grocery Stores and wanted to leverage their investment by merging the stores with Albertsons and then spin off the combined company as part of an IPO. The only problem is the Federal Government rejected the merger unless Cerberus agreed to sell off 140+ stores to make sure their Safeway/Albertsons combination wouldn't limit market competition.

So, who did Cerberus find as a buyer of the 140+ stores they were forced to sell - Haggen. Haggen went from a company with 18 stores to a company with 150+ stores almost overnight and they went bankrupt within a year of the acquisition.

Jobs will be lost, lives will be destroyed and landlords will be faced with empty buildings that will be difficult to rent. There will be lots of losers but just one winner - Cerberus.

Some things never change.....

[squish]

We have several Haggen's closing in our area. Smart and Final has stepped up to take over the stores but the remodel to their design will take a while.

The whole thing is a shame. We lost some real nice supermarkets and a lot of people are out of work. I believe Smart and Final is going to hire back as many as they can, but what a shame.

[XDCX]

Originally Posted by squish

The whole thing is a shame. We lost some real nice supermarkets and a lot of people are out of work. I believe Smart and Final is going to hire back as many as they can, but what a shame.

I agree.

I'm still a 100% Capitalist and believe that companies should be allowed to act in the best interests of their shareholders but in this case it appears that Cerberus simply outsmarted the federal regulators by selling off the stores they were forced to divest to a company they knew would fail.

In the Seattle area Haggen had already started to downsize and close stores before they did their deal with Cerberus. They were down to 18 stores when they did their deal to buy 140+ stores from Cerberus - they didn't have the talent or the capital to manage an acquisition of that size.

I tend to follow the news in Lake Havasu since I really like that area and just like you describe there will be a lot of people in Havasu who had been loyal to Albertsons for years who will lose their jobs and I'm betting that building will remain vacant for at least one year before the landlord finds another tenant.

[XDCX]

Originally Posted by XDCX

I tend to follow the news in Lake Havasu since I really like that area and just like you describe there will be a lot of people in Havasu who had been loyal to Albertsons for years who will lose their jobs and I'm betting that building will remain vacant for at least one year before the landlord finds another tenant.

I thought of this thread when I was driving through Lake Havasu last week and noticed that Albertsons has re-opened the store they were originally required to sell by the Federal Government.

In my eyes Cerberus clearly outsmarted the government - they agreed to sell off certain stores to a weak competitor to meet the government's mandate to limit market control and then bought back the stores when the competitor filed Chapter 11 Bankruptcy.

Geez, Cerberus outsmarted the Federal Government - it's not like that's never happened before....

[Jeff Duvall]

Who financed the deal for Hagens and why?

[XDCX]

Originally Posted by Jeff Duvall

Who financed the deal for Hagens and why?

Sorry for my delay in responding - I was taking some time away from the Internet.

Concerning your question, I'm not sure of the answer but I'm curious too. When I get caught up I'll do some digging and see if I can find the answer. It would be interesting to see which creditors took the biggest hit when Haggen's filed for Chapter 11 Bankruptcy.