Judge OKs Haggen sale to Albertsons

A U.S. bankruptcy court in Delaware has approved the sale of the remaining 29 Haggen stores to Albertsons, essentially ending what’s been a tumultuous 15 months for the Bellingham grocer.

U.S. Bankruptcy Judge Kevin Gross signed an order approving the asset purchase agreement Tuesday. Gross also signed an order allowing for closing sales to begin at three stores in Puyallup, Port Angeles and Oregon City, Oregon.

Albertsons will pay around $106.1 million for Haggen’s core stores in an agreement that was reached March 11. Albertsons has said it intends to keep the Haggen store name on 15 of the stores. The remaining 14 will switch to the Albertsons name. The Haggen corporate office will remain in Bellingham, although it is unclear how many of those employees will remain.

Two South Sound stores — at 1406 Lake Tapps Parkway E. in Auburn and at 1313 Cooper Point Road SW in Olympia — will maintain the Haggen brand. Two others — at 8611 Steilacoom Blvd. SW in Lakewood and 3520 Pacific Ave. SE in Olympia — will transition to the Albertsons brand.

Albertsons chairman and CEO Bob Miller said that they plan to continue offering things that Haggen stores are known for — local products in stores operated by the same local employees.

Albertsons spokesman Brian Dowling sent a written statement saying the company is pleased with the court approval. He added that Albertsons expects to close on the deal in the next several weeks. Haggen officials had no comment about the court’s sale approval.

The fact that Albertsons intends to keep the Haggen brand and the features that made the Northwest grocer successful comes as a relief to customers and local companies that supply the store with products. Nathan Weston, who operates Joe’s Gardens in Bellingham with his family, is excited at the prospect of Haggen being allowed to continue.

“I’m hoping they keep the core model and the idea of Haggen,” Weston said, noting that it’s one of the few remaining local grocery store names left that once dominated the area and developed its brand locally.

Joe’s Gardens is one of Haggen’s oldest vendors. The garden on the south side of town started supplying products to Haggen stores in 1933. For decades, Joe’s Gardens had supplied vegetables to the Haggen stores. In recent years, Joe’s Gardens has supplied more flowers and plants, including herb starts, to seven Whatcom and Skagit County Haggen stores.

Weston said it was scary for the vendor to watch Haggen go through the bankruptcy process, not just for the community but because it meant a lot of business to Joe’s Gardens. During the past few months, Weston said, things have gone smoothly with the grocer and believe that it will continue under new ownership.

The United Food and Commercial Workers International Union voiced its support Tuesday. The union represents the workers at the Haggen and Albertsons stores and said Albertsons would offer employment to all UFCW members within the Haggen stores. Workers also could keep their seniority, current wages, earned sick leave and vacation days.

“We are absolutely committed to partnering with Albertsons to provide all of these communities with better jobs and the best grocery store experience possible,” The UFCW said in a written statement.

The sale to Albertsons brings closure to the end of what’s been a strange, complicated trip for the company. After being purchased by the Florida private equity firm Comvest Partners in 2011, Haggen purchased 146 Albertson/Safeway stores in December to help satisfy a Federal Trade Commission requirement for that merger to be completed.

The Bellingham-based grocery struggled to convert those stores to the Haggen brand, leading to Albertsons and Haggen suing each other for damages, which was later resolved. Then came the Chapter 11 bankruptcy Sept. 8, followed by the closing and auctioning off of most of the stores Haggen had purchased. After several postponements of the core-store auction, Haggen agreed to be purchased.

Staff writer C.R. Roberts contributed to this report.

This story was originally published March 29, 2016 at 2:55 PM with the headline "Judge OKs Haggen sale to Albertsons."