Historic grocery chain A&P filed for bankruptcy for the second time in five years on Sunday.
For the second time in five years, 156-year-old grocery store operator Great Atlantic & Pacific Tea Co. (A&P) filed for chapter 11 bankruptcy protection, laying out plans to sell off or close many of its stores.
The Wall Street Journal reports that the company, which currently operates 296 stores under the A&P, Best Cellars, Pathmark and Superfresh names, filed papers in U.S. Bankruptcy Court in the Southern District of New York on Sunday.
New Jersey-based A&P, which has debts of about $2.3 billion and assets of about $1.6 billion, states in the filing that it has already begun talks with Acme Markets Inc. – the owner of Safeway and Albertsons supermarkets – Stop & Shop Supermarket Co and Key Food Stores Co-operative Inc about buying its assets.
Those supermarket companies are thought to be the lead bidders for as many as 120 of A&P’s stores at a purchase price of about $600 million, the WSJ reports.
The 120 stores affected by the possible purchase employ about 12,500 of A&P’s current 28,500 employees in Connecticut, Delaware, Maryland, New Jersey, New York, and Pennsylvania.
In addition to the 120 stores up for sale, the company says it has already earmarked 25 locations for a quick closure. It was unclear how many people work at those locations.
A&P posted a note on its website Monday morning reassuring customers that many of its stores are open for business.
“The vast majority of our stores are operating normally and will be fully stocked during this process. While some stores will close in the near-term, the vast majority will continue providing customers with the same high-quality products and exceptional customer service,” the company said in a statement. “We will also continue to honor all existing customer promotional and loyalty programs. Serving our customers has been and will continue to be our #1 priority.”
This isn’t the first time A&P has run into financial issues. Back in 2010, the company filed for bankruptcy, only to reemerge two years later as a private company after obtaining financing from investors including Goldman Sachs and billionaire Ron Burkle, Reuters reports.
The company, which began as a mail order business in 1859, has struggled in recent years to keep up with discounts from large box stores likes of Walmart and Costco and high-end retailers like Whole Foods.
A&P Files for Chapter 11 Bankruptcy [The Wall Street Journal]
Grocery store chain A&P files for bankruptcy again [Reuters]
by Ashlee Kieler via Consumerist
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