In what was a landscape-altering but not widely unexpected move, A&P said last week it would be selling off its 296 stores ”” including its 25 Westchester locations and four Fairfield County locations ”” and had executed purchase agreements for 120 stores worth approximately $600 million.
Its parent company, The Great Atlantic & Pacific Tea Co., announced July 20 it had filed for Chapter 11 protection in U.S. Bankruptcy Court in White Plains. The long-struggling grocery chain ”” which also operates Best Cellars, Food Basics, The Food Emporium, Pathmark, Superfresh and Waldbaums ”” had previously filed for protection against creditors in 2010. In a statement, the company said the majority of stores will continue to operate before purchases are finalized, but 25 will close in the near future due to operating losses.
“After careful consideration of all alternatives, we have concluded that a sale process implemented through Chapter 11 is the best way for A&P to preserve as many jobs as possible, and maximize value for all stakeholders,” said Paul Hertz, president and CEO of A&P. “The interest from other strategic operators has been robust during the company”™s sales process to date, and we have every expectation that will continue in Chapter 11.”
- A new owner has yet to be named for the A&P store on Mamaroneck Avenue in Mamaroneck.
Acme Markets Inc., a Pennsylvania-based subsidiary of Albertsons Cos., said it placed bids on 16 A&P locations in Westchester that are slated to close: Bedford, Briarcliff Manor, Bronxville, Croton-on-Hudson, Goldens Bridge, Greenburgh, Millwood, Mohegan Lake, New Rochelle, Rye Brook, Scarsdale, Shrub Oak, Thornwood, Yorktown and two Yonkers locations. Staten Island-based Key Food Stores Co-operative Inc. said it had placed a bid to acquire an A&P location on Halstead Avenue in Harrison.
As of July 22, A&P stores in Hastings-on-Hudson, Katonah, Mamaroneck, Peekskill, Port Chester and three Central Avenue stores in Scarsdale and Yonkers had yet to find buyers.
Stop & Shop, the Massachusetts-based grocery chain, announced on July 21 it reached a $146 million agreement to acquire 25 A&P-owned grocery stores in New York and New Jersey, including a Mount Kisco location. Of the 25 affected locations, 14 are Pathmark stores, nine are Waldbaums and two are A&P locations, including the A&P store at 195 N. Bedford Road in Mount Kisco. Stop & Shop, which operates a regional office in Purchase, said in a press release it plans to convert the 25 locations into Stop & Shop stores. The deal is expected to close in the second half of this year.
“Stop & Shop is always looking for convenient locations to better serve our customers,” said Don Sussman, the grocer”™s New York metro division president. “We are very happy to have the opportunity to expand our presence in greater New York and serve new customers.”
Once a top-10 national grocer, New Jersey-based A&P now operates 296 stores in four states, including Fairfield County locations in Greenwich, Stamford and Danbury. As most grocery stores have, A&P has seen increased competition from big-box stores such as Walmart and Target now selling similar products, as well as rapidly expanding pharmacy chains. The company, which brands itself as the nation”™s oldest grocery chain, traces its roots to 1859. Germany-based Tengelmann Group, previously the largest shareholder in the group of stores, was unable to turn the stores around in the late 20th century before A&P filed for bankruptcy in 2010.
According to Hearst Connecticut Media, the company cited $2.3 billion in debt and $1.6 billion in assets in its bankruptcy filing. Burt P. Flickinger III, managing director at Strategic Resource Group, told the Business Journal in June that A&P has been crippled over the past decade and more by the success of Stop & Shop and ShopRite supermarkets.
“A&P was a powerhouse leader in Westchester County for nearly 100 years,” Flickinger said.
A&P has asked bids to be received by Sept. 15 and expects court approval for the sales of stores Bankruptcy Court by Oct. 15. A&P said on July 20 that it was approved by U.S. Bankruptcy Court to access $50 million debtor-in-possession financing from Fortress Investment Group, which will allow the company to continue operating stores and paying suppliers, vendors and employees.
Following A&P”™s announcement, The United Food and Commercial Workers International Union said it hoped the buyers of A&P stores would consider the chain”™s current employees.
“With respect to the 30,000 great men and women who work at A&P and are part of our union family, we understand the uncertainty and concern that this bankruptcy announcement brings,” the union said in a statement. “For the sake of the men and women of A&P, now is the time for A&P and any potential buyer to focus on doing what is right for our hard-working members and their families.”
Acme Markets operates 107 stores in New Jersey, Pennsylvania, Delaware and Maryland. Key Food, founded in Brooklyn in 1937, has more than 180 independently owned stores throughout New York, New Jersey and Pennsylvania, including a Pleasantville location.
Stop & Shop, which is owned by Dutch retailer Ahold, has 395 stores in New York, Connecticut, New Jersey, Massachusetts and Rhode Island.
