Having A Hard Time Haggen Declare Bankruptcy Defense, Parts With Southwest Co-CEO

The step is the most current in a saga that began earlier this year when Haggen took control of 146 stores shed by Albertsons and Safeway after their merger, primarily in California, Nevada and Arizona– markets where the 18-store Pacific Northwest grocer was unknown.

Haggen, backed by Comvest, a personal equity firm based in Florida, paid more than $300 million for the stores, according to court files. It prepared for a big ramp-up as regulatory authorities authorized the sale in late January. But its aspirations ultimately backfired.

Comvest decreased to comment Wednesday for this story.

Haggen’s higher costs turned many consumers off, and in June the business began reducing staff member hours and laying off hundreds. The layoffs activated a firestorm of negative press throughout Haggen’s vastly expanded territory, and plenty of litigation, including from a developmentally disabled former worker who was laid off. Unions also cried nasty.

Last month, Haggen said it would close or offer about a fifth of the stores it bought, and last week it sued Albertsons for $1 billion, implicating the grocery giant of sabotaging its entry into the brand-new markets. In the suit, Haggen blamed the higher costs it was charging clients on unreliable pricing info Albertsons provided during the change.

Albertsons previously had actually taken legal action against Haggen for failing to pay for some stock transferred with the stores.

In the bankruptcy filing, Haggen tallied the nearly $52 million it owes to dozens of suppliers, including Unified Grocers, Starbucks and Charlie’s Produce, a Seattle supplier and long time Haggen partner that opened a new division in Southern California to serve its client there.

About the Author

Logan

View Posts →