Haggen could eventually sell core stores as current auction takes shape

The Uptown Gig Harbor Haggen store is one of the area stores on the auction block Wednesday.
The Uptown Gig Harbor Haggen store is one of the area stores on the auction block Wednesday. Staff photographer

Haggen, a Bellingham-based grocery chain, is putting plans in place to potentially sell its core stores.

The company had planned to shed 95 stores to return to solvency with a much smaller core of profitable stores concentrated in the Northwest.

But in a new document filed with a federal bankruptcy court in Delaware, the chain said it wants to discuss the sale of its 32 core stores to increase payments to the stores’ creditors.

“The debtors (Haggen) have decided, in their business judgment, to sell all or substantially all of the assets — which collectively represent the debtors’ most valuable store locations — in order to further maximize recoveries to the debtors estates, their creditors and all parties in interest,” according to the court document.

The company has scheduled a hearing Dec. 4 at the U.S. Bankruptcy Court in Wilmington, Delaware, to discuss the sale of its core stores.

The filing could be a Plan B if the auction of the noncore stores doesn’t bring in enough money to pay off creditors. It could also mean the core stores could get sold to either another grocery chain or investment firm, which would either keep the Haggen name or change it to something else.

In an email, Haggen officials said they are required to explore potential outside opportunities for all of its stores.

“Despite the filing, Haggen does not anticipate any changes to continuing operations at the core stores including regular payments to suppliers and partners,” the statement said. Haggen officials did not elaborate beyond the email.

Haggen is currently auctioning off 95 stores, 18 of which are in Washington. Of those 18, five are in Pierce County and another is in Federal Way.

Among early bidders for those stores was Albertsons, which had entered bids on 36 stores. The large chain is bidding on stores in Washington, Oregon and Arizona.

Albertsons has already entered baseline bids for four of the five Pierce County stores. Those stores are at 15805 Pacific Ave. S. in Spanaway, 4831 Point Fosdick Drive NW in Gig Harbor, 11012 Canyon Road E. in Puyallup and 2800 Milton Way in Milton. No potential buyer entered an early baseline bid on the fifth Pierce County store on the market, which is at 111 S. 38th St. in Tacoma. The Federal Way store at 31009 Pacific Highway S. also did not attract a baseline bid, but could be sold Wednesday at auction.

Many of the stores for sale were purchased from Albertsons and Safeway in December. Haggen struggled to convert many of the stores to their brand and filed for bankruptcy protection in September.

The union that represents hundreds of Haggen grocery employees said it is hoping that the sale leads to the reopening of those stores and the restoration of union jobs.

“We’re standing back for now waiting to see how the sales work out,” said Nathe Lawver, communications director for United Food and Commercial Workers Local 367. “We’ll want to work with the new owners to restore service to the neighborhoods where the stores are located,” he said. The UFCW previously had a contract with Albertsons for workers in many of the stores it sold.

Albertsons was forced to sell the stores last year by the Federal Trade Commission when it merged with Safeway.

The auction began Monday and is scheduled to go through Wednesday (Nov. 11), according to court documents filed in relation to Haggen’s recent Chapter 11 bankruptcy. Many of the Washington and Oregon stores up for auction are scheduled to be auctioned off Wednesday, while the the Arizona, Southern California and Nevada stores were scheduled for Monday and Tuesday.

The other Washington stores are in the Seattle, Aberdeen and Bremerton areas.

Albertsons originally sold the stores to Haggen at the beginning of the year in a 146-store package that eventually led to Haggen filing Chapter 11 reorganization in September. In the 12 Washington stores that Albertsons is bidding on, the baseline bids range from $1 each for the Burien, Renton, Spanaway, Puyallup and Milton locations to $1.7 million for a second store in Renton. The Gig Harbor store’s baseline auction bid from Albertsons is $500,000.

While Albertsons has established a baseline bid on 36 stores, other bidders are expected to bid on these locations.

In an emailed statement, Haggen said it “anticipates an active auction for the sale of the remainder of the non-core stores that were marketed for sale.”

Haggen’s previously announced that the sale of eight stores to Gelson’s and 28 to Smart & Final did not have anyone else bid higher, so that sale will be presented to the bankruptcy court for approval at a hearing Friday. Haggen has said it was selling one Nevada and 27 Southern California stores to Smart & Final LLC and eight Southern California stores to Gelson’s Markets for more than $90 million.


Staff writer John Gillie, The Associated Press and The Bellingham Herald contributed to this report.