Hundreds of Haggen workers in Washington state will lose their jobs as a result of Thursday’s store closure announcement - and the layoff totals are higher in the Southwest, where Haggen took on an ill-fated expansion and is now in full retreat.
On Friday, state Employment Security officials released notice that Haggen is laying off 200 workers in Washington in the latest round of planned closures, which includes stores in Tacoma, Gig Harbor, Milton and Port Orchard. Other stores in the state slated for closure are in Aberdeen, Bremerton, Burien, Everett, Liberty Lake, Monroe, Shoreline, Silverdale and two stores in Renton. Haggen said in court filings that no third party is likely to make an offer for the stores.
The chain plans to leave the California, Nevada and Arizona markets entirely to focus on 37 "core" stores in this state and Oregon. The remaining stores consist of 16 of the original stores and 21 of the stores it acquired when Albertsons and Safeway were ordered by federal regulators to divest those locations last year as part of their merger.
None of the closures affect stores in Whatcom or Skagit counties.
“The 21 newly-acquired stores have proven successful under the Haggen banner and the company anticipates they will continue to see increased customer counts and sales growth as Haggen continues its original mission of adding more fresh, local and exclusive items to these new stores,” the company said in a news release.
Before its massive expansion, Haggen had 18 locations, including a stand-alone pharmacy. It went from having about 2,000 employees to nearly 11,000. The targeted closures will result in thousands of lost jobs, including more than 5,000 in the Southwest.
Workers at the stores being closed will get a 60-day notice, and all stores will remain open through that period, Haggen said, adding that pay and benefits will continue.
“The failure of Haggen has affected all of us,” Terry O’Toole, a worker at the Gig Harbor Haggen store, told The Seattle Times earlier this week.
Haggen said that it is continuing to work with Albertsons in its request to the Federal Trade Commission to waive the portion of an order that restricts Albertsons from hiring Haggen employees. On Friday, U.S. Rep. Derek Kilmer called on the FTC to grant the waiver.
“Approving this request would be a significant step forward in treating this resilient workforce with the appropriate dignity and respect,” Kilmer wrote.
Hilco has been hired to handle the liquidation sale of the 100 stores, which is expected to conclude in mid-November.
Haggen employs some 5,140 people in California, Nevada and Arizona, where it’s closing all of its locations, according to court documents.
It also employs some 3,730 in former Albertsons and Safeway stores in Washington and Oregon. The Oregon stores slated for closure are in Tigard, Springfield, Baker City, Beaverton, Milwaukie, Sherwood and Ashland.
A committee of unsecured creditors that includes UFCW and suppliers such as Starbucks wants to see the stores offered for sale before they are shuttered.
“We think there could be interest out there for a lot of these stores and are trying to make sure they are marketed on that basis,” said Robert Feinstein, an attorney representing the committee.
Haggen wants to begin closing the stores as soon as possible because the locations are collectively losing $400,000 a day, it said in court documents. The closures would save it nearly $60 million for the remainder of the year.
Haggen on Thursday also asked the court to authorize retention payments averaging about $7,000 to 231 key employees, including store and pharmacy managers, so they stay through the closings and oversee the wind-down.
The FTC originally thought Haggen would be a good fit to keep competition alive in areas where the merger between Albertsons and Safeway might make the combined company too powerful.
But the unraveling was unprecedentedly quick. Haggen seemingly failed to take even in high-income areas, as shoppers were turned off by what they considered high prices and complained about the lack of flyers and other advertising. Haggen ended up filing for Chapter 11 bankruptcy protection on Sept. 8.
Haggen blamed its expansion debacle on Albertsons, which it is suing for $1 billion for allegedly sabotaging the smaller grocer’s entry into the new markets.
Previously, Albertsons had sued Haggen for not paying for some of the inventory it transferred with the stores.