Tops Friendly Markets to file for bankruptcy

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cathandler
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Tops Friendly Markets to file for bankruptcy

Post by cathandler » February 17th, 2018, 3:24 pm

I always wondered why this perpetually money-losing grocer kept expanding.
http://www.syracuse.com/news/index.ssf/ ... uptcy.html
https://www.bloomberg.com/news/articles ... bankruptcy

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Re: Tops Friendly Markets to file for bankruptcy

Post by mbz321 » February 17th, 2018, 7:34 pm

Besides the investment firms loading them with debit, I don't see how they aren't making money...their only overall competition is Wegmans, with Price Chopper and some others smaller players here and there. In a lot of areas, Tops is the only grocery store for miles around.

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Re: Tops Friendly Markets to file for bankruptcy

Post by rwsandiego » February 17th, 2018, 11:17 pm

mbz321 wrote:
February 17th, 2018, 7:34 pm
Besides the investment firms loading them with debt...
I think you have the answer.

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Re: Tops Friendly Markets to file for bankruptcy

Post by storewanderer » February 18th, 2018, 12:01 am

Funny how we have two former Ahold Divisions, Tops, and Bi Lo, both which went to investment firms, both facing a similar situation at a similar time. Or maybe it isn't so funny...

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Re: Tops Friendly Markets to file for bankruptcy

Post by pseudo3d » February 18th, 2018, 6:07 am

I got the impression that Tops was never really trying to compete with other grocers in a competitive sense (similar square footage, modern stores with a focus on prepared foods, naturals/organics) and did its own thing. This is in contrast to basically every modern supermarket except for maybe Winn-Dixie, and Winn-Dixie has put out a few half-hearted attempts to have something like that with things like pizza and sandwiches.

In the last 5-8 years, besides taking on a bunch of smaller independents and stores at the end of their run (Penn Traffic, Big M, Grand Union), they've also downscaled some stores by 20,000 to 30,000 square feet. I had mentioned this in a Groceteria thread asking about some stores they opened in the early 1990s that approached 90k-100k square foot as a way of competing with Wegmans.

Meanwhile, they're also running a bunch of VERY small stores, Wikipedia has a picture of their Boston, NY store, and that's about 8,000 square feet. No modern chain has a store that small unless it was some sort of highly profitable legacy store in a location that they would never be able to get nowadays (or a small "urban market" concept). Things coming to mind include the former A&P/current Rouses at Royal Street in New Orleans, the Vons in Avalon CA, that sort of thing.

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Re: Tops Friendly Markets to file for bankruptcy

Post by rwsandiego » February 18th, 2018, 8:31 am

storewanderer wrote:
February 18th, 2018, 12:01 am
Funny how we have two former Ahold Divisions, Tops, and Bi Lo, both which went to investment firms, both facing a similar situation at a similar time. Or maybe it isn't so funny...
These would not be the first two retail chains that were driven toward bankruptcy after being taken over by a private equity firm. They get loaded up with debt, don't invest in the stores, and then fail to attract enough customers to cover operating expenses and debt and interest payments. Here are a couple of pieces about this topic:

Business Insider

Retail Wire

Fordham School of Law

pseudo3d
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Re: Tops Friendly Markets to file for bankruptcy

Post by pseudo3d » February 18th, 2018, 1:10 pm

rwsandiego wrote:
February 18th, 2018, 8:31 am
storewanderer wrote:
February 18th, 2018, 12:01 am
Funny how we have two former Ahold Divisions, Tops, and Bi Lo, both which went to investment firms, both facing a similar situation at a similar time. Or maybe it isn't so funny...
These would not be the first two retail chains that were driven toward bankruptcy after being taken over by a private equity firm. They get loaded up with debt, don't invest in the stores, and then fail to attract enough customers to cover operating expenses and debt and interest payments. Here are a couple of pieces about this topic:

Business Insider

Retail Wire

Fordham School of Law
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.

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Re: Tops Friendly Markets to file for bankruptcy

Post by klkla » 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.

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Re: Tops Friendly Markets to file for bankruptcy

Post by cathandler » February 19th, 2018, 12:32 pm

The union has been aware of Tops' problems since January; pension liability is an issue as well
https://www.democratandchronicle.com/st ... 349459002/

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Re: Tops Friendly Markets to file for bankruptcy

Post by BillyGr » February 20th, 2018, 9:28 am

pseudo3d wrote:
February 18th, 2018, 6:07 am
In the last 5-8 years, besides taking on a bunch of smaller independents and stores at the end of their run (Penn Traffic, Big M, Grand Union), they've also downscaled some stores by 20,000 to 30,000 square feet. I had mentioned this in a Groceteria thread asking about some stores they opened in the early 1990s that approached 90k-100k square foot as a way of competing with Wegmans.

Meanwhile, they're also running a bunch of VERY small stores, Wikipedia has a picture of their Boston, NY store, and that's about 8,000 square feet. No modern chain has a store that small unless it was some sort of highly profitable legacy store in a location that they would never be able to get nowadays (or a small "urban market" concept). Things coming to mind include the former A&P/current Rouses at Royal Street in New Orleans, the Vons in Avalon CA, that sort of thing.
Not being certain about that Boston store, but many of the others they have gotten (those smaller independents and the remaining Grand Union stores at least) are in smaller town areas. In at least some cases, it may be anywhere from a few minutes to an hour (maybe more in some spots) to drive to the next area where there would be a larger supermarket (or one not owned by Tops, as happens in the Adirondacks where you might pass 2 or 3 Tops before finding a town with other choices).

Thus one would think those stores would do at least reasonably well - people might make that longer trip to stock up on many items, but not daily or several times a week for a few needed items. Also, those more rural areas would be less likely to have the options of getting stuff brought to them to help out either.

It may just be that there aren't enough of those stores within the chain to offset the ones with more competition where they can't compete.

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