Haggen is moving forward with plans to auction off its remaining core stores, including five in Whatcom County.
U.S. Bankruptcy Judge Kevin Gross signed an order on Friday, Dec. 4 approving the bidding procedures for the auction of the Bellingham grocer’s 33 core stores. The auction is scheduled to take place on Friday, Feb. 5, about a month later than the first proposed auction date.
Court documents indicate that the auction process will be similar to the non-core store auction held in November. The company will actively market the stores and can negotiate a deal with a potential buyer in what is called a stalking horse auction format. The stalking horse deal can be used to establish a baseline for the auction; other qualified bidders can then come in and offer more for the stores. The company has until Thursday, Jan. 21, to establish a stalking horse purchaser, according to court documents.
With this auction, the intention is to sell the group of stores in one block. In the November auction, the stores were sold off in pieces to different sellers.
In a written statement, Haggen officials said they expect the core group to draw many potential buyers.
According to the written statement “The Haggen group of core stores is well run with great staff and is located in great communities. As a group they are profitable. Because of this, we know there will be strong interest in our stores as a group. Our stores are staffed and stocked to high standards and we are well prepared to offer a great store experience for our guests during this holiday time.”
The remaining core stores are in Washington and Oregon. For this auction, the company added a store in Eugene, Ore., to its core list, increasing the total to 33.
This is the latest step as the company navigates through its Chapter 11 bankruptcy. Earlier this year the company purchased 146 stores from Albertsons and Safeway to help satisfy a Federal Trade Commission requirement of shedding stores before a Safeway-Albertsons merger. Haggen struggled mightily in converting those stores, leading to the bankruptcy.
Friday’s announcement does not necessarily mean the end of the Haggen store name. As a part of this sales process, an investor or buyer could come in and purchase the core stores with the intention of keeping the brand, which is well-known in the Pacific Northwest. It is also possible that the Comvest Group, the Florida private investment firm that became the major stakeholder in the company in 2011, could enter the auction and be the high bidder.
It’s also possible that a different grocer could be the high bidder and convert the stores, marking the end of the Haggen era.
The auction of the core stores was originally scheduled for Jan. 8, but the court received several objection filings, including one from the United Food and Commercial Workers International Union, which represents the Haggen workers. In its objection, the union said to have the process take place during the holiday season simply didn’t make sense and would “diminish the value for the estate.”
It appears Haggen heeded that objection, because the new timeline for the auction shows no major deadlines or actions will take place until mid-January.