Bellingham, Washington-based Haggen mushroomed in size at the beginning of 2015 by acquiring 146 grocery stores across the West from Boise-based Albertsons and Safeway. Those two chains had to unload stores to gain federal approval to merge.
But the acquired stores struggled under the new brand. Now 33 Haggen grocery stores in Oregon and Washington are set to go on the auction block Wednesday as part of a bankruptcy restructuring.
Documents filed with the U.S. Bankruptcy Court in Delaware show Albertsons submitted "baseline" bids to buy back 16 of its former stores in Oregon and Washington -- plus another 20 in California, Nevada and Arizona.
A Haggen spokeswoman said the company "anticipates an active auction," so there's no guarantee that Albertsons will come out on top.
Court filings indicated that as of last Friday approximately 40 bidders had registered to participate in the Haggen auction. Other grocery companies to express interest in Northwest store locations include Yoke's Foods, Inc. of Spokane and Asian American supermarket chain 99 Ranch Market.
The Oregon Haggen stores on the auction block Wednesday are a mixture of operating and shuttered locations in Klamath Falls, Eugene, Ashland, Grants Pass, Baker City and the Portland suburbs. The affected Haggen stores in Washington state are mostly suburban locations in the central Puget Sound region along with Aberdeen and Liberty Lake.
Wednesday is the final day of a three-day auction, which is taking place in a Los Angeles hotel meeting room. A total of 95 Haggen stores across five states are listed for sale during this auction. Separately, the bankruptcy court has scheduled a hearing on Friday to finalize the sale of eight Southern California stores to Gelson's and 28 stores to Smart & Final. Those additional locations were offered for sale previously.
Watching from afar is the Federal Trade Commission, which retains an interest in preventing excessive consolidation in the Northwest grocery business. An FTC spokesperson declined to speculate what kind of review may occur post-auction.
When this all shakes out, Haggen would be left with 31 to 37 "core" stores in Washington and Oregon, depending on how many of the Northwest stores get an acceptable final bid. Before its big acquisition of divested Safeway and Albertsons stores, Haggen operated 18 supermarkets.
Haggen and Albertsons filed dueling lawsuits against each other as the smaller chain slid into bankruptcy. Haggen claims Albertsons deliberately undermined the store conversions. Albertsons in turn sued Haggen for allegedly failing to pay for inventory it inherited.
In September, Haggen submitted government-required mass layoff notices in preparation to close dozens of stores around the end of November. It's unclear at this point whether the supermarkets on the auction block will stay open continuously while ownership changes hands.
The United Food and Commercial Workers union said it has representatives at the auction to advocate for its members' interests. Some of the grocery chains that are potential buyers are unionized while others are not.
In an emailed statement, the international union office said, "While the hard-working men and women of Haggen’s have all been experiencing untold frustration and concern during these past few months, we will stand together and support one another through these difficult times."
Copyright 2015 Northwest News Network
