The court approved two separate purchase agreements. One allows Gelson’s to purchase eight stores, including locations in Laguna Beach and Thousand Oaks, for approximately $36 million. A separate purchase agreement allows Smart & Final LLC to buy 28 stores for $56 million. Those include markets in Chino Hills, Palmdale, Torrance, Redondo Beach, Simi Valley and Westlake Village.
Completion of those transactions remain subject to certain conditions, Haggen officials said.
A representative for Gelson’s said Monday the company has confirmed only six of the eight store sales to Gelson’s. That’s because an objection to the sale has been submitted to the bankruptcy court by the landlord for store locations in Laguna Beach and Carlsbad.
“We’re excited to become part of these communities, a process that may take time in order to customize stores for each neighborhood,” Gelson’s President and CEO Rob McDougall said in a statement. “Our goal is to retain as many local Haggen workers as possible while also giving opportunities to existing Gelson’s employees, as well as others who wish to join the Gelson’s family.”
Bellingham,Wash.-based Haggen also has accepted bids for 55 additional non-core supermarkets for a total of $47 million. Haggen plans to submit the results of the auction for approval to the bankruptcy court at a Nov. 24 hearing.
Albertsons is looking to buy the largest number of locations — 33 in all. Other bidders include Smart & Final Stores LLC, Sprouts Farmers Market, Stater Bros. Markets, SB Grocery LLC, Tustin Safe LLC, Tawa Inc., Balboa Retail LLC, Good Food Holdings, RSJ Investment Group, Donahue Schriber Realty Group, Regency Centers LP, Carnival Supermarkets Inc. and Yoke’s Foods Inc.
Haggen acquired 146 stores, including 83 California locations, earlier this year that previously operated as Vons or Albertsons. Those stores were among 168 supermarkets that had to be sold because of antitrust concerns when Cerberus Capital Management, the private investment company that owns Albertsons, received approval from the Federal Trade Commission to buy Safeway (Vons’ parent company) for about $9.2 billion.
It’s unclear as to how Albertsons would be allowed to buy back stores it initially had to shed as part of Cerberus Capital’s acquisition of Safeway. But the FTC in September approved a request by Albertsons that allowed the grocery chain to rehire employees who had transferred to Haggen.
Officials with the FTC and Albertsons could not be reached for comment Monday.
Haggen had initially been operating 18 stores with 2,000 employees in the Pacific Northwest. The company’s acquisition of 146 Vons and Albertsons supermarkets boosted that to 164 stores with more than 10,000 employees in Washington, Oregon, Nevada, Arizona and California.
But soon after the newly acquired stores were up and running Haggen began cutting employee hours and laying off workers. Shoppers, union leaders and others said the company did virtually no advertising and that items were overpriced. Many of the stores were virtually devoid of business as a result.
Haggen filed for Chapter 11 bankruptcy protection in early September.
The United Food and Commercial Workers Union, which has represented Haggen workers in Southern California, said it looks forward to working with Albertsons to ensure that the stores the company buys back are a success.
“We are completely committed to helping UFCW members and their families through this extremely difficult period,” the union said. “For the remaining stores that have not been sold, we know this brings great stress and uncertainty to our members and their families. We do not know if any further auctions or sales will occur and it is likely that all unsold stores will close within the coming weeks. Our primary focus going forward will be helping our members find good jobs to support themselves and their families.”