Lake Oswego, West Linn stores not on list of Haggen’s latest closings

Published 12:00 am Tuesday, October 6, 2015

Haggen Foord & Pharmacy says it plans to focus on 37 stores in the Pacific Northwest, including 21 former Albertsons and Safeway locations it converted earlier this year.

Haggen Food & Pharmacy notified government officials in Oregon and Washington this morning that it plans to sell or close 21 more stores and lay off hundreds more workers.

Neither the Lake Oswego store on Boones Ferry Road nor the West Linn store on Blankenship Road are on the latest list.

Stores slated to be closed in the Portland metro area include supermarkets in Beaverton, Milwaukie, Sherwood and Tigard. Also on the latest Oregon list: stores in Ashland, Baker City and Springfield.

Closure of the seven Oregon stores alone will result in 416 layoffs between Nov. 24 and Dec. 8, according to the state Office of Community Colleges and Workforce Development. Officials said the closings are expected to be permanent and that the stores will close whether a buyer is found or not.

Friday’s announcement comes on the heels of Haggen’s announcement earlier this week that it would abandon its plans to expand operations into California, Arizona and Nevada, closing dozens of stores in those states as it winds its way through the Chapter 11 bankruptcy process.

Instead, the company will focus on 37 core stores and one stand-alone pharmacy in the Pacific Northwest. Those locations include 16 stores and the pharmacy previously owned by Haggen, as well as 21 stores — including the Lake Oswego and West Linn locations — that were acquired from Albertsons and Safeway earlier this year.

The full list of affected stores is available online at http://bit.ly/1MNY08E.

“Haggen plans to continue to build its brand in partnership with its dedicated corporate support and store teams. Haggen has a long record of success in the Pacific Northwest, and these identified stores will have the best prospect for ongoing excellence,” Haggen Pacific Northwest CEO John Clougher said in a prepared statement. “Although this has been a difficult process and experience, we will remain concentrated in the Pacific Northwest where we began, focusing on fresh Northwest products and continuing our support and involvement in the communities we serve.”

Haggen filed for Chapter 11 bankruptcy in mid-September, adding another twist to the winding road the grocery chain has found itself on since opening stores across the West earlier this year.

“After careful consideration of all alternatives, the company concluded that a reorganization through the Chapter 11 process is the best way for Haggen to preserve value for all stakeholders,” Clougher said at the time. “The action we are taking today will allow us to continue to serve our customers and communities while providing Haggen with a process to re-align our operations to be positioned for the future.”

Haggen had planned to operate stores across five states, the vast majority of which it purchased from Albertsons and Safeway when the two grocery giants merged in 2014.

Haggen exploded in size, growing from 18 stores to 164 and becoming one of the West Coast’s largest grocery chains practically overnight. But the company struggled to gain a foothold in new markets, particularly California and Arizona, which were unused to the brand.

In August, the company announced that it would close 27 stores across five states. The supermarket chain had already cut hours and laid off staff at several stores. In its bankruptcy announcement on Sept. 15, the company said that it was working to sell many of the company’s remaining assets as well.

The 22-page federal bankruptcy court filing lists millions in debt owed to dozens of creditors, from multinational companies like Coca-Cola and Frito Lay to former employees. The supermarket chain’s largest creditor, Unified Grocer, is owed an estimated $14.8 million, according to court documents.

The company’s former president and CEO, Dale Henley, is owed nearly $5 million in deferred compensation. Henley retired from Haggen in 2010 after 26 years with the company.

Albertsons is also listed as a creditor and is owed an “undetermined” amount of money.

Albertsons sued Haggen for $41 million in July, claiming the grocer hadn’t paid for several of the stores it purchased from the company.

Haggen, in turn, filed a $1 billion countersuit on Sept. 1, alleging that Albertsons sabotaged Haggen’s efforts by lying about the pricing of its merchandise and providing less stock than needed.

The company didn’t mince words when it came to why it had filed for bankruptcy, placing the blame squarely on the shoulders of Albertsons.

“The associated conversion process of the stores made Albertsons cooperation and good faith implementation of the terms of the deal … essential,” the company wrote. “This did not occur … which ultimately led to Haggen’s failure in its efforts to convert newly acquired stores and ultimately resulting in the Chapter 11 filing.”

Reporter Geoff Pursinger contributed to this story. Contact Gary M. Stein at 503-636-1281 ext. 102 or gstein@lakeoswegoreview.com.