Grocery Pain Spreads as Kroger-Backed Lucky’s Goes Bankrupt
Grocery Pain Spreads as Kroger-Backed Lucky’s Files Bankruptcy
(Bloomberg) -- Lucky’s Market, a Colorado-based grocer that bills itself as offering “organic for the 99%,” filed for bankruptcy after it began closing most of its stores. About 3,000 jobs are at stake.
The company listed assets of as much as $500 million and liabilities of at least that amount in a bankruptcy petition filed Monday in Delaware.
Lucky’s operated 39 stores before it started winding down and liquidating 32 of them in recent weeks, court papers show. Offers have been received from third parties for equipment and leases at about 26 stores, with an asset purchase agreement already signed by Aldi Stores and negotiations underway for certain other stores, according to a filing.
Terms are being finalized for the sale of the seven stores still operating, Lucky said. Store closings are expected to be completed by the end of February with help from liquidation consulting firm Great American Global Partners LLC.
Lucky’s arranged an investment from The Kroger Co. in 2016, but the grocery giant said in December it would divest and took a $238 million impairment on the stake. Bankruptcy court papers list Kroger as owning 55% of Lucky’s Market Parent Company LLC.
Chapter 11 bankruptcy allows a company to continue operating while it works out a plan to pay creditors. Some Lucky’s stores in Colorado, Ohio, Florida, Michigan and Missouri will stay open, the company said in a tweet last week.
The retailer sought protection from creditors just days after Fairway Group Holdings Corp., the Manhattan grocer that fell prey to a high debt load and competition from the likes of Whole Foods Market Inc. Groceries have come under pressure from home delivery services such as Amazon.com, as well as competition from food sections at Walmart, Target and Costco stores.
A Lucky’s representative didn’t immediately respond to a request for comment.
The case is Lucky’s Market Parent Company LLC, 20-10166-JTD, U.S. Bankruptcy Court for the District of Delaware.
To contact the reporter on this story: Jeremy Hill in New York at jhill273@bloomberg.net
To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Dawn McCarty
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