The bankrupt Haggen supermarket chain is following through on its promise to unload a few of its California locations as the company looks to refocus its operations on 37 stores in the Pacific Northwest.
(NYSE:SFS) of Commerce says its making a bid to acquire store leases and related assets from affiliates of Haggen Holdings LLC for $56 million in cash.
According to Haggen, Gelson’s is looking to purchase eight California stores – including Ladera Ranch and Laguna Beach. The core stores include 16 of Haggen’s historical stores, one stand-alone pharmacy and 21 stores acquired from Albertson’s.
If approved, the retailer plans to convert the stores to its Smart & Final Extra brand in central and southern California, along with one Las Vegas store. Employees received a 60 day notice of pending store and office closures. All dates are tentative and must be approved in bankruptcy court.
The inside of the now vacant Haggen grocery store on Newbury Road in Newbury Park.
Both agreements are subject to bankruptcy court approval.Haggen voluntarily filed for Chapter 11 in September, allowing the embattled grocer to continue conducting business while seeking financial relief and paying its creditors.
Neither Haggen nor the Encino-based grocer, Gelson’s, confirmed a purchase price. Haggen officials said they are also requesting a hearing later this month to propose bidding procedures for other stores.
“Haggen also filed motions to approve two separate asset purchase agreements for stalking horse bidder packages”, the release said. It wants a court hearing on Oct. 19 to go over the procedures, and invited interested bidders to indicate their interest no later than Oct. 26.
In exchange for making the first offers to buy, Gelson’s and Smart & Final will likely receive a few kind of perk from the bankruptcy courts for taking the risk of setting a higher price before any auction proceeds.