Haggen Grocery Chain To Leave Arizona, California and Nevada

Haggen Inc will leave California following a dramatic expansion that went terribly wrong forcing the chain of grocery stores to file this month for bankruptcy protection.

The company, based in Bellingham, Washington said on Thursday it was closing every store in California as part of its large exit from the Southwest including Nevada and Arizona.

That will affect a minimum of 100 outlets with 67 of them in California. This follows the closing of 27 locations that were announced in August including 16 in California.

Haggen is planning to keep 37 of its stores in Oregon and Washington, which is where it is based.

Haggen has struggled since paying what was estimated by analysts over $1.4 billion for 126 Vons, Pavilions, Albertsons and Safeway grocery stores.

Safeway and Albertsons were ordered by regulators to divest the locations last year as part of the merger they entered into.

With a bold strike, Haggen expanded radically from a chain of 18 stores in just the Pacific Northwest to a West Coast regional player.

For much of the early part of 2015, the company converted the new stores to their Haggen brand, promising high-quality seafood, meat and organic foods at very low prices.

However, the chain did not catch on as grocery shoppers complained about prices and selection.

The majority owner of majority Haggen is Comvest Partners based in Florida. By closing these locations, the company is estimating it will save close to $57.4 million for the remainder of its fiscal year and make another $125.5 million through the liquidation of stores.

Analysts believe that most of the locations being closed will remain as supermarkets given the sizes of the stores and the equipment that is inside of them.

Haggen filed for bankruptcy protection earlier this month and said it received as much as $215 million in commitments for financing from existing lenders to keep its operating going.

The company did not say how many of its employees would lose their jobs by the closing of the stores.

 

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