Tops Friendly Markets to file for bankruptcy

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pseudo3d
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Re: Tops Friendly Markets to file for bankruptcy

Post by pseudo3d » February 20th, 2018, 7:31 pm

klkla wrote:
February 18th, 2018, 7:04 pm
pseudo3d wrote:
February 18th, 2018, 1:10 pm
It's not just recently, this has been going back years. This is how a lot of the Safeway spin-offs sunk (like AppleTree) was just a lot of debt load and not being able to do much with the chain as a result. I don't think private equity firms are to blame. A lot of retail establishments have done poorly in moving forward (new prototypes, adapting to Walmart and Amazon, etc.), and my personal opinion is that an industry-wide move many years ago of eliminating salespeople and demoralizing employees helped push consumers away from specialty/department stores to cheaper discount stores and online retailers.
The Safeway spin-offs were different. Those were divisions that nobody wanted and so the local management put together financing and bought them with the intention of operating the chains successfully.

While there are some good private equity firms there are others that exist simply to enrich themselves and have no interest in the long term success of the company, their employees, the communities they serve or the customers. They buy these companies using debt only, and then pay themselves large dividends and management fees and then add more debt so they can keep doing that until they have drained every penny they can get and then declare bankruptcy. They are never held accountable or required to reinvest money back into the company.
I wouldn't say no one wanted the Safeway spin-offs (and besides, Vons bought the SoCal division), they were just too big by themselves to become an acquisition target but also too big to operate successfully with the funds they had. Harvest Foods might have worked as they had good money but they took a wrong turn by spending a lot of money on Skaggs stores a few states away. AppleTree succumbed to heavy competition in Houston early on but the College Station/Bryan stores outlasted the Houston stores by nearly a decade.

As a point to the "too big for an acquisition", in 1999 Kroger had wanted to purchase the Texas Division of Winn-Dixie (even the milk plant)--I don't have a link because I wrote this all my cell phone but it's a Google search away. It would've put Kroger up higher in terms of market share in DFW (as of 1996 they were behind Albertsons, Tom Thumb, and Minyard) and allowed them to enter Waco, Oklahoma, and a few smaller North Texas markets. It also would give them four stores in Bryan-College Station, what with a new store coming a year away (they never had more than 3, now down to 2). The FTC ultimately caused Kroger to drop the bid and by 2002 they only took 7 stores. All this is important because despite the Texas Division being (arguably) trash, it was still a collection of stores somebody wanted.

As to Tops, their small and dated stores are going to be a hard sell for any larger retailer.

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Re: Tops Friendly Markets to file for bankruptcy

Post by wnetmacman » February 22nd, 2018, 7:43 am

pseudo3d wrote:
February 18th, 2018, 1:10 pm
It's not just recently, this has been going back years. This is how a lot of the Safeway spin-offs sunk (like AppleTree) was just a lot of debt load and not being able to do much with the chain as a result. I don't think private equity firms are to blame. A lot of retail establishments have done poorly in moving forward (new prototypes, adapting to Walmart and Amazon, etc.), and my personal opinion is that an industry-wide move many years ago of eliminating salespeople and demoralizing employees helped push consumers away from specialty/department stores to cheaper discount stores and online retailers.
But a piece of important information you have missed comparing Tops to at least three of the Safeway spinoffs (only Homeland still operates in Oklahoma, Harvest Foods in Arkansas and Apple Tree out of Houston both went under as a larger chain before 2000) is that in the case of the Safeway spinoffs, much was changed from what customers were accustomed to. Harvest Foods bounced between multiple owners, as has Homeland since. Apple Tree was a strange anomaly in that the Houston and other outlying stores died off quickly, but a second buyout kept the Bryan/College Station stores open much longer, but as a separate group. Tops was always sold whole, and kept largely as is after that spinoff.
pseudo3d wrote:
February 20th, 2018, 7:31 pm
I wouldn't say no one wanted the Safeway spin-offs (and besides, Vons bought the SoCal division), they were just too big by themselves to become an acquisition target but also too big to operate successfully with the funds they had. Harvest Foods might have worked as they had good money but they took a wrong turn by spending a lot of money on Skaggs stores a few states away. AppleTree succumbed to heavy competition in Houston early on but the College Station/Bryan stores outlasted the Houston stores by nearly a decade.
The Skaggs stores Harvest Foods bought were in Arkansas. In their home area. The stores were not the same as the old Safeways they initially purchased, and they didn't do well with them. Being sold to Affiliated Foods Southwest, who was also deep in their own pile of poo doomed the whole thing. Apple Tree never had a chance in Houston. If Safeway couldn't make them work, a little independent largely made up of former Safeway managers with the same mentality wasn't going far with them either.

Kroger wouldn't have been able to buy any of the four Safeway division castoffs except Oklahoma as a whole, as there was no direct competition. Dallas, Houston and Little Rock all have Kroger in a high ranking to this day. Maybe Ahold could have, as they have never done anything in Texas, but they would most likely have failed, as by 1987-1989 when this all happened, most of Safeway in those four areas were old stores (15-20+ years old) with little hope of rejuvenation. Some still survive, but 30 years out, they are ancient now. This was a large reason Dallas was just closed and parted out like a junk car.
pseudo3d wrote:
February 20th, 2018, 7:31 pm
As a point to the "too big for an acquisition", in 1999 Kroger had wanted to purchase the Texas Division of Winn-Dixie (even the milk plant)--I don't have a link because I wrote this all my cell phone but it's a Google search away. It would've put Kroger up higher in terms of market share in DFW (as of 1996 they were behind Albertsons, Tom Thumb, and Minyard) and allowed them to enter Waco, Oklahoma, and a few smaller North Texas markets. It also would give them four stores in Bryan-College Station, what with a new store coming a year away (they never had more than 3, now down to 2). The FTC ultimately caused Kroger to drop the bid and by 2002 they only took 7 stores. All this is important because despite the Texas Division being (arguably) trash, it was still a collection of stores somebody wanted.
Kroger knew that trying to get WD Texas was a huge gamble, and that it would have resulted in mass closings. In virtually every market WD operated outside Dallas, a better, larger Kroger store existed. (Longview, Marshall, Henderson, Paris) Only in one major town in East Texas did a WD exist that Kroger didn't get, and that was Kilgore. I'm still not sure what happened there. In DFW, there wasn't a chance, even though Fort Worth had more WD stores than Dallas did. They knew the feds were going to take that down fast, but it also discouraged others from trying. WD Texas was parted out much in the same matter as Safeway Dallas. Tops is in danger of the same if they can't turn things around.

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Re: Tops Friendly Markets to file for bankruptcy

Post by architect » February 22nd, 2018, 8:08 pm

pseudo3d wrote:
February 20th, 2018, 7:31 pm
The FTC ultimately caused Kroger to drop the bid and by 2002 they only took 7 stores. All this is important because despite the Texas Division being (arguably) trash, it was still a collection of stores somebody wanted.
Interestingly, almost all of these Kroger-acquired Winn Dixies are still operating, despite the stores being noticeably outdated by today's standards. By the way, there were actually at least 8 stores acquired by Kroger:


Still open today:
- 9135 Boulevard 26, North Richland Hills, TX
- 708 E Pipeline Rd, Hurst
- 2210 S Fielder Rd, Arlington
- 2525 W Interstate 20, Grand Prairie
- 1919 Faithon P Lucas Sr Blvd, Mesquite
- 3770 Belt Line Rd, Addison
- 6805 Main St, The Colony

Plus one closed store:
- 6479 Camp Bowie, Fort Worth

In addition, Tom Thumb acquired at least one location in Garland (since closed due to being at a low-traffic intersection and killed by Safeway's mid-2000's Texas woes). Brookshires also acquired several locations, most of which are still in operation outside of a Super 1 Food which closed in Forest Hill last year (isolated, somewhat economically depressed area).

The moral of the story here is that even stores which do not seem to make logical sense (undersized, poor location, etc.) can sometimes be successful in the right market and operator (particularly in cases of limited barrier to entry, which would apply in much of Tops' market area). As an example, for years, Kroger has planned to replace the Addison Winn Dixie location with a more modern store, but has simply been unable to find the real estate to do so. As a result, the company has invested quite a bit in renovations to this store over the last couple of years to at least attempt to modernize the store to the fullest extent possible. Regardless, even in it's current outdated state, it still pulls good business. A similar situation has occurred with the location in The Colony. Similarly, many of Tops' stores could likely be valuable to another operator just by shear virtue of being in built-out established areas.

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Re: Tops Friendly Markets to file for bankruptcy

Post by pseudo3d » February 22nd, 2018, 8:18 pm

wnetmacman wrote:
February 22nd, 2018, 7:43 am
But a piece of important information you have missed comparing Tops to at least three of the Safeway spinoffs (only Homeland still operates in Oklahoma, Harvest Foods in Arkansas and Apple Tree out of Houston both went under as a larger chain before 2000) is that in the case of the Safeway spinoffs, much was changed from what customers were accustomed to. Harvest Foods bounced between multiple owners, as has Homeland since. Apple Tree was a strange anomaly in that the Houston and other outlying stores died off quickly, but a second buyout kept the Bryan/College Station stores open much longer, but as a separate group. Tops was always sold whole, and kept largely as is after that spinoff.
That is true. AppleTree (and others) were left with things like a distribution center, milk plant, and bakery (probably a similar case for others) but without the vast store brands and buying power that Safeway had. It was essentially the same scenario as the Dallas Division, but had a sucker to take the fall for them.


The Skaggs stores Harvest Foods bought were in Arkansas. In their home area. The stores were not the same as the old Safeways they initially purchased, and they didn't do well with them. Being sold to Affiliated Foods Southwest, who was also deep in their own pile of poo doomed the whole thing. Apple Tree never had a chance in Houston. If Safeway couldn't make them work, a little independent largely made up of former Safeway managers with the same mentality wasn't going far with them either.
Actually, they tried to expand to Wichita with the Skaggs stores. Many links to newspaper articles to explain the back story in this thread.
Kroger wouldn't have been able to buy any of the four Safeway division castoffs except Oklahoma as a whole, as there was no direct competition. Dallas, Houston and Little Rock all have Kroger in a high ranking to this day. Maybe Ahold could have, as they have never done anything in Texas, but they would most likely have failed, as by 1987-1989 when this all happened, most of Safeway in those four areas were old stores (15-20+ years old) with little hope of rejuvenation. Some still survive, but 30 years out, they are ancient now. This was a large reason Dallas was just closed and parted out like a junk car.
Well, Kroger wouldn't have afforded it either, they had some money issues themselves (fighting off a hostile takeover) that ground store growth to a halt in Houston in the late 1980s and early 1990s, and this allowed Randalls to briefly eclipse Kroger in terms of market share. The tide began to turn in the mid-1990s when the purchase of Cullum Cos. bogged Randalls down while Kroger made serious efforts to modernize its store base (hello, Signature!) and expand again, with Kroger re-taking #1 in 1999. (Things would go much, much worse for Randalls).

In the end, Kroger took a lot of the better Houston stores, Fiesta took the older stores (a few of which are still in operation), and Randalls took a few Houston stores but mostly the Austin stores (including some garbage stores that aren't even grocery stores anymore, like the store in Killeen).

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Re: Tops Friendly Markets to file for bankruptcy

Post by J-Man » August 31st, 2018, 8:57 am


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Re: Tops Friendly Markets to file for bankruptcy

Post by BillyGr » August 31st, 2018, 2:23 pm

J-Man wrote:
August 31st, 2018, 8:57 am
Tops closing 10 stores in upstate NY.
The Saranac Lake one makes lots of sense. There have been two stores in that (fairly small) area, one right in town and one a bit out on the edge in a retail/restaurants/lodging strip.

They were both Grand Unions originally, and survived through the first sale to Tops, back to Grand Union and back to Tops again - never made a lot of sense to have two of the same store so close in that smallish area.

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Re: Tops Friendly Markets to file for bankruptcy

Post by cathandler » December 2nd, 2018, 6:31 pm

In reviewing the closure of one of the Saranac Lake Tops Markets, I was struck by the fact that this smallish town has an Aldi. I would have thought that Aldi's business model wouldn't scale to smaller markets like this, and yet this store is one of many in smaller towns in upstate New York. Those of us in New England who regard Aldi as more of a curiosity than a genuine threat to the major players thus far might want to stay tuned.

As for Tops itself, they recently emerged from bankruptcy with a fair amount of debt (though far less than is probably necessary) eliminated. I don't think the road gets any better for them moving forward. From all evidence they are a mediocre grocer in every aspect, and with non-competitive pricing to boot. As before, their only advantage is being in markets where they face minimal competition.

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Re: Tops Friendly Markets to file for bankruptcy

Post by BillyGr » December 3rd, 2018, 8:37 am

cathandler wrote:
December 2nd, 2018, 6:31 pm
In reviewing the closure of one of the Saranac Lake Tops Markets, I was struck by the fact that this smallish town has an Aldi. I would have thought that Aldi's business model wouldn't scale to smaller markets like this, and yet this store is one of many in smaller towns in upstate New York. Those of us in New England who regard Aldi as more of a curiosity than a genuine threat to the major players thus far might want to stay tuned.

As for Tops itself, they recently emerged from bankruptcy with a fair amount of debt (though far less than is probably necessary) eliminated. I don't think the road gets any better for them moving forward. From all evidence they are a mediocre grocer in every aspect, and with non-competitive pricing to boot. As before, their only advantage is being in markets where they face minimal competition.
It may simply be that that area (along with Lake Placid) is kind of the "shopping center" of a much larger area.

While Saranac has the Tops and Aldi, and Lake Placid has Price Chopper and Hannaford, one can drive quite a distance in several directions from there (30 miles and up) without finding other towns with much more than the occasional convenience store (mostly Stewarts these days) and maybe a scattered drug store or Dollar General/Family Dollar type store.
Thus those stores likely get more business than many small town stores would as they are really serving a bunch of small towns, not just one, and as you say the pricing isn't the only issue (as finding cheaper options in many cases requires a long trip that may be worthwhile once in a while, but not on a regular basis, and may sometimes be difficult, particularly this time of year).

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