Haggen to close, liquidate 100 more stores

[kr.abs.swy]

I don't understand how what they are doing now isn't the worst possible scenario for everyone.

The stores are losing value every day (if sold as a going concern) because customers keep going in, seeing empty shelves (and closed pharmacies) and going somewhere else. The going concern value of the stores without a pharmacy has to be materially less.

The employees are losing because they will be out of jobs within a couple of months. I was in one of the Henderson stores today. There were only about 2X as many customers as employees. The employees weren't unpleasant (the checker was actually very friendly), but none of them bothered to ask if they could help me. Probably because they got tired of answering difficult questions like "Where is the bread?" or "Where is the Coke?"

The company and creditors are losing because Haggen is burning through cash keeping these stores open having phantom going out of business sales (in which inventory generally seems not to be being replenished as it is sold, but there are no store-wide sales), instead of just ending the misery. If they would publicize a going-out-of-business sale, they could at least draw a few customers into the store.

Does no one want these stores? Is Haggen chasing pennies, trying to negotiate a better deal (Kroger? Stater Bros.? Albertsons) while the value of the assets deteriorates by the day? Is Haggen being unrealistic in what it is asking? Some of the closing stores are in isolated towns that have supported two grocery stores for decades (Baker City, with an Albertsons and a Safeway, and Boulder City with a Vons and an Albertsons, for example) and I just can't imagine that these stores aren't viable for someone (Kroger comes to mind as an obvious example in both of those cases).

I was in one of the Henderson stores today. Truly, if the Haggen integration was mismanaged, the wind-down is even worse. The sign outside the pharmacy directing customers to CVS had the address of one store scratched out, with another store number and address written in -- they didn't even seem to know where the pharmacy records were being transferred to (or they changed their mind). There were empty shelves all over -- no bread except Orowheat or Dave's Killer Bread, slim pickings on the chip aisle, produce levels were low, no bagels, no sushi, no Coke, low stock in the liquor section, etc. There were several bin refrigerators in the back of the store that were entirely empty. Floral was being cleared out. No one was playing slots. Aside from a few 12-packs of Fanta and Tab, there were NO Coke products in the store. They seemed to be trying to liquidate Haggen brand items (there was a display of Haggen napkins on formerly empty chip shelves, there was Haggen microwave popcorn on formerly empty chip shelves, there was Haggen bottled water on many of the Coke shelves -- complete with new shelf tags). And these Haggen products were FINALLY priced at levels that might excite shoppers (99 cents for microwave popcorn, 99 cents for saltines, etc.) -- why didn't they try that four months ago?

I just can't imagine how this situation could be handled any worse ...

Ironically, I saw some O Organics canned goods on the shelves that I hadn't noticed before. (This was a former Albertsons). Albertsons managed to get a few O products into the store before the divestiture, but Haggen still hasn't been able to sell them.

Haggen management looks incompetent. The FTC looks inept. I can't believe how many wistful comments I've seen in story comments, Yelp reviews, etc., with people longing wistfully for Albertsons and Safeway to come back. It's just staggering how badly this has been handled. In a world where the only grocery stores people seem to get excited about are Whole Foods and Trader Joe's, these guys actually have people longing for an Albertsons to come back.

EVERY other time I have seen a pharmacy close, the "pharmacy" sign on the exterior of the store comes down the second the pharmacy closes or is covered with a tarp (presumably due to legal considerations). Yet this Haggen pharmacy closed on 10-8 but the "pharmacy" sign was still up on the exterior of the store. Do they want more legal problems? At the least, someone needs to go buy a tarp and cover the "pharmacy" sign. (The pharmacy sign had been ripped down from the interior).

Sorry for the rant ... I just can't believe how badly this has been handled. And management thinks they need to pay themselves bonuses. They should let them go; I truly can't imagine how anyone else could do any worse. Convert it to a Chapter 7 and end the misery.

[klkla]

I was in one of the Henderson stores today. Truly, if the Haggen integration was mismanaged, the wind-down is even worse. The sign outside the pharmacy directing customers to CVS had the address of one store scratched out, with another store number and address written in -- they didn't even seem to know where the pharmacy records were being transferred to (or they changed their mind). There were empty shelves all over -- no bread except Orowheat or Dave's Killer Bread, slim pickings on the chip aisle, produce levels were low, no bagels, no sushi, no Coke, low stock in the liquor section, etc. There were several bin refrigerators in the back of the store that were entirely empty. Floral was being cleared out. No one was playing slots. Aside from a few 12-packs of Fanta and Tab, there were NO Coke products in the store. They seemed to be trying to liquidate Haggen brand items (there was a display of Haggen napkins on formerly empty chip shelves, there was Haggen microwave popcorn on formerly empty chip shelves, there was Haggen bottled water on many of the Coke shelves -- complete with new shelf tags). And these Haggen products were FINALLY priced at levels that might excite shoppers (99 cents for microwave popcorn, 99 cents for saltines, etc.) -- why didn't they try that four months ago?

Wow, what a mess!

The DIP hearing is tomorrow. If all goes well they should have some money coming in by the end of the week and be able to pay Coke and the other DSD vendors (assuming they even want to now).

Kroger and Stater Bros might be sitting on the fence waiting to see what happens tomorrow before making an offer because tomorrow's ruling could certainly have an impact on the value of the stores. Based on what you observed a ruling against them might even force them into a Chapter 7 situation.

In the UFCW's complaint they allege Haggen wasn't even trying to sell the stores as going concerns and directly appealed to companies interested in doing so to contact them and the other creditors directly instead of Haggen.

[kr.abs.swy]

Photos from another Henderson Haggen today.

At this one, the manager had apparently decided to condense shelves (as opposed to the first one I went to, where they didn't), which made the store feel even more empty. There were enormous sections of empty shelves in soda, frozen and chips. Meat and produce were far less than fully stocked.

At about 5:15 p.m., the only fried food available from the deli was fried chicken (no corn dogs, etc.). Two checkstands were open; at some points, no one was up there. The customer service booth was closed. I've truly never seen anything like it. A busy 7-Eleven could do as much volume as this store was doing.

They had filled in the bread aisle with what seemed to be an assortment of whatever they had extra of ... some cereal, some juice, some water, some Pop Tarts, etc. There was some Orowheat bread and not much else.

They had managed to get a limited assortment of Halloween candy out.

For what it's worth, this store had two Redbox machines. Certainly there's much more that goes into whether a store is viable, but a store with 2 Redbox machines has at some point at the very least had an above average level of Redbox volume.

This was one of the Albertsons stores where the customer service counter was originally just inside the store, facing the front door (with the pharmacy on the other side). Someone along the line had moved customer service to the front wall (SuperValu?) and Haggen had absolutely nothing on that wall, so you walk into the store and see ... a wall with a Haggen logo.

Prescriptions at this store had been transferred to a Vons.

Interestingly, at some point down the line, someone has walled off part of the selling floor of this store. This appeared to be one of the Albertsons stores that had an experimental garden section. The area of the store next to the garden section was walled off and was being used as a break room. The customer door that led into this area had been mostly covered (but I was able to peek around it). The frozen food section was on the other side, which makes me think that it had been walled off under SuperValu, because Haggen would not have had time to move the freezers around during their 48 hour conversions.

Meanwhile the garden section was being used as storage for some odd fixtures and as an employee smoking area.

20151012_170954_resized_1.jpg (160.32 KiB) Viewed 4601 times

20151012_170905_resized_1.jpg (88.16 KiB) Viewed 4601 times

20151012_170742_resized_1.jpg (89.64 KiB) Viewed 4601 times

[kr.abs.swy]

Photos part 2

20151012_171626_resized_1.jpg (97.26 KiB) Viewed 4601 times

20151012_171450_resized_1.jpg (126.41 KiB) Viewed 4601 times

20151012_171150_resized_1.jpg (128.46 KiB) Viewed 4601 times

Note the Albertsons logo on the Claritin display, of which none was in stock.

[kr.abs.swy]

Photos part 3

20151012_171750_resized_1.jpg (126.73 KiB) Viewed 4601 times

20151012_171734_resized_1.jpg (98.59 KiB) Viewed 4601 times

20151012_171652_resized_1.jpg (122.23 KiB) Viewed 4601 times

[kr.abs.swy]

Photos part 4

20151012_172334_resized_1.jpg (90.16 KiB) Viewed 4601 times

20151012_172246_resized_1.jpg (125.95 KiB) Viewed 4601 times

The door that is visible above in the former garden area probably leads into what is now the employee break room area. There is another former customer door at the front of the store that would lead directly into the break room. It's sad to see so much potential selling space being wasted ...

[klkla]

Wells Fargo filed an objection to the store closings today saying that Federal banking laws requires= a 90 day warning (120 days in low income areas) before a bank branch can be closed and they operate numerous branches inside Haggen stores. Don't know how much effect this will have but it's an interesting angle I never thought about.

[storewanderer]

Scolaris closed a Reno Store in November 2014 and the in-store Wells Fargo is still operating inside the vacant store to this day.

Scolaris closed another Reno Store in June 2015 and the in-store Wells Fargo is still operating inside this store as the building is being remodeled into a large medical complex. I think this Wells Fargo is ultimately going to close.

As of the above two actions, Wells Fargo no longer operates branches inside any Scolaris Stores.

Since Haggen is bankrupt I am assuming they can break the leases with Wells Fargo?

Maybe Haggen hasn't yet notified Wells Fargo of closure dates... would be consistent with their lack of knowing what in the heck they are doing.

[VibeGuy]

From the deli section of the Port Orchard, WA (former Safeway) location:

image.jpeg (145.02 KiB) Viewed 4118 times

image.jpeg (144.38 KiB) Viewed 4118 times

[SamSpade]

What a contrast these images present! I was in the "going concern" former Albertson's at the corner of Walnut and Barrows Rd. in Beaverton. The store was clean, well stocked and looked like business as usual. There were even a decent amount of customers. Upon leaving the area, I took Murray Blvd, which goes north through Beaverton. The area is right on the border of Beaverton and Tigard.

In the attached image, you can see the shopping centre on Scholls Ferry (major thoroughfare, state highway designation) Road which is just south of Safeway. Just southwest of Haggen is the new New Seasons Market and Progress Ridge Town Center.

I think the main issue for this store is that there are several competitors nearby and it has a weak retail centre around it. PRTC is a "destination" with Cinetopia and a broad mix of local and regional retailers, restaurants, etc. and is well laid out adjacent to a lake and designed as a regional draw alongside a neighbourhood shopping centre. Murrayhill Marketplace is a more traditional neighbourhood centre but it contains a chain gymnasium, is adjacent to another diverse centre with a branch of the Beaverton library, etc. Of course, just up Murray Blvd. from all of this stands the former standalone classic Haggen which was converted into a Walmart neighborhood market.