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It’s official: Judge OKs Haggen sale to Albertsons

The Haggen grocery store at Barkley Village in Bellingham is shown Tuesday Feb. 9, 2016.
The Haggen grocery store at Barkley Village in Bellingham is shown Tuesday Feb. 9, 2016. pdwyer@bhamherald.com

A U.S. bankruptcy court in Delaware has approved the sale of the remaining 29 Haggen stores to Albertsons, essentially ending what’s been a tumultuous 15 months for the Bellingham grocer.

U.S. Bankruptcy Judge Kevin Gross signed an order approving the asset purchase agreement on Tuesday, March 29. Gross also signed an order allowing for closing sales to begin at three stores in Puyallup, Port Angeles and Oregon City, Ore.

Albertsons will pay around $106.1 million for Haggen’s core stores in an agreement that was reached on Friday, March 11. Albertsons has said it intends to keep the Haggen store name on 15 of those stores, including five in Whatcom County. The remaining 14 would switch over to the Albertsons name. The Haggen corporate office will also remain in Bellingham, although it is unclear at this point how many of those employees will remain.

Albertsons chairman and CEO Bob Miller said that they plan to continue offering things that Haggen stores are known for — local products in stores operated by the same local employees.

Albertsons spokesman Brian Dowling sent a written statement saying the company is pleased with the court approval. He added that Albertsons expects to close on the deal in the next several weeks. Haggen officials had no comment about the court’s sale approval.

We would not be here if Haggen didn’t start buying our Honey Crisps years ago.

Dorie Belisle, BelleWood Acres

The fact that Albertsons intends to keep the Haggen brand and the features that made the Northwest grocer successful comes as a relief to customers and local companies that supply the store with products. Nathan Weston, who operates Joe’s Gardens in Bellingham with his family, is excited at the prospect of Haggen being allowed to continue.

“I’m hoping they keep the core model and the idea of Haggen,” Weston said, noting that it’s one of the few remaining local grocery store names left that once dominated the area and developed its brand locally.

Joe’s Gardens is one of Haggen’s oldest vendors. The garden on the south side of town started supplying products to Haggen stores in 1933. For decades, Joe’s Gardens had supplied vegetables to the Haggen stores; in recent years Joe’s Gardens has supplied more flowers and plants, including herb starts, to seven Whatcom and Skagit county Haggen stores.

Weston said it was very scary for the vendor to watch Haggen go through the bankruptcy process, not just for the community but because it meant a lot of business to Joe’s Gardens. During the past few months, Weston said things have gone smoothly with the grocer and believes that it will continue under new ownership.

Dorie Belisle of BelleWood Acres is also hoping Albertsons continues Haggen’s focus on local products. She said Haggen has been a major supporter of BelleWood Acres products for years, which includes apples, peanut butter, apple chips and sauces.

“We would not be here if Haggen didn’t start buying our Honey Crisps years ago,” Belisle said.

She said they’ve also been treated fairly during the bankruptcy, continuing to get paid for the products, particularly the perishable products that keep the business operating.

The United Food and Commercial Workers International Union announced its support for the proposed plan on Friday, March 25. The union represents the workers at the Haggen and Albertsons stores and said Albertsons would offer employment to all UFCW members within the Haggen stores. Workers also could keep their seniority, current wages, earned sick leave and vacation days.

“We are absolutely committed to partnering with Albertsons to provide all of these communities with better jobs and the best grocery store experience possible,” The UFCW said in a written statement.

Weston said one of the most important things Albertsons can do is keep the workers in place, because that’s one aspect of Haggen he doesn’t want to see disappear.

“The staff at Haggen is so personable and respectful; I enjoy working working with them and shopping there,” Weston said.

The sale to Albertsons also brings closure to the end of what’s been a strange, complicated trip for the company. After being purchased by the Florida private equity firm Comvest Partners in 2011, Haggen purchased 146 Albertson/Safeway stores last December, which helped Albertsons satisfy a Federal Trade Commission requirement for its merger with Safeway to be completed.

The Bellingham-based grocery struggled to convert those stores to the Haggen brand, leading to Albertsons and Haggen suing each other for damages, which was later resolved. Then came the Chapter 11 bankruptcy on Sept. 8, followed by the closing and auctioning off of most of the stores Haggen had purchased. After several postponements of the core-store auction, Haggen agreed to be purchased.

HISTORIC HAGGEN STORES 

Dave Gallagher: 360-715-2269, @BhamHeraldBiz

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