Haggen to close two more stores in attempt to improve bottom line

THE BELLINGHAM HERALDJuly 31, 2013 

Jonathan Cooper stocks canned foods at the Barkley Village Haggen store in this 2003 photo.

THE BELLINGHAM HERALD

Bellingham-based Haggen has announced two more grocery store closures, but company officials say it's part of a restructuring plan that will lead to improved health and long-term growth for the company.

The two store closures are in Bellevue and Shoreline, both of which had been converted from TOP Food & Drug to the Haggen Northwest Fresh brand. The Bellevue store was remodeled in November 2011, while the Shoreline store was converted in July 2012.

So far this year Haggen has announced five store closures; the others were in Tacoma, Lacey and Federal Way.

The company originally made the decision to convert the Bellevue and Shoreline stores to try to boost lagging sales rather than close them, said Clement Stevens, co-president and senior vice president of merchandising of Haggen Inc.

"Unfortunately, despite our best efforts, we were unable to turn these stores around. These closures enable us to free up capital and enable us to focus our efforts on our thriving stores," Stevens said in a news release.

In an interview, Stevens said the company's strategy is to close the underperforming stores and eventually convert the other TOP Food stores to the Haggen Northwest Fresh brand. The company has seven TOP Food stores left after the Tacoma store closes and Olympia converts to a Haggen in August. Most of the remaining TOP stores are in the Seattle area.

"We have a strong foundation here at Haggen. It's a company that's been here 80 years, and we plan on being here another 80," said Stevens. "Right now we're focused on getting ourselves to our fighting weight."

In a statement, co-owner Rick Haggen added that these are the right steps to take, even though they're difficult in the short term.

"These are necessary changes that should position Haggen for business success," he said.

In evaluating what stores to remodel or close, the company is looking at demographics and what other competition is nearby, said John Turley, co-president and chief operations officer. From a demographic standpoint, they are looking closely at whether customers in those TOP Food areas will go for the stronger focus on Pacific Northwest products. The TOP (Tough on Prices) brand was introduced in 1982 as a way for Haggen to enter new regions with a focus on low prices.

"(Having two brands) certainly worked in the 1980s, but the focus now is on the Haggen brand," Turley said. "We've been happy with the conversions."

Stevens said they've been particularly pleased with the acceptance of the Northwest Fresh concept in Whatcom County, an area that has five Haggen stores.

"What is important to us is that the customer likes it," Stevens said, referring to the changes.

Reach Business Editor Dave Gallagher at 360-715-2269 or dave.gallagher@bellinghamherald.com. Read his Business blog at blogs.bellinghamherald.com/business or follow him on Twitter at @bhamheraldbiz.

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