Auction for core Haggen stores delayed

By Oliver Lazenby

An auction for Haggen Food and Pharmacy’s remaining stores has been delayed until next week, according to a document filed in U.S. Bankruptcy Court in Delaware on February 8.

The bankrupt company is selling its remaining 33 “core stores,” which includes all five Whatcom County stores and its standalone pharmacy in Bellingham. The auction will take place at 9 a.m. Eastern time on Monday, February 22, at the law offices of Stroock & Stroock & Lavan in New York City.

This is the third time the auction has been delayed. The auction was previously scheduled for February 11. Before that, it was scheduled for January 8. No reason was given for the delays.

After the auction, Bellingham-based Haggen will have three days to notify the court of successful bidders. Before awarding ownership, the court will take into account any objections to the sales that landlords or other interested parties make.

Bidders interested in participating in the auction had until January 29 to submit a baseline bid. Court records as of February 2 didn’t indicate who made bids.

The stores should attract interest. Haggen officials said last year in a prepared statement that the group of stores is “well run with great staff and is located in great communities. As a group they are profitable.”

The auction is part of the company’s bankruptcy process, which is the result of a failed expansion down the West Coast.

The company bought 146 stores from Albertsons last year, after the Federal Trade Commission ruled that Albertsons had to sell stores in certain markets before completing a $9.2 billion merger with Safeway.

With the purchase, Haggen went from owning 18 stores in Washington and Oregon to 164 stores across five West Coast states.

Haggen’s huge purchase turned out to be more than it could handle and the company immediately ran into problems with pricing, inventory, advertising and competition from Albertsons and others. Haggen alleged in a $1 billion lawsuit that Albertsons intentionally sabotaged Haggen’s expansion. Albertsons settled with Haggen in January, agreeing to pay $5.75 million to the bankrupt company, according to various media reports.

Haggen held auctions late last year for stores in five West Coast states as it retreated from its new territory in California, Nevada and Arizona by selling and closing the stores it bought last year.

Albertsons was the big winner at a November auction, submitting the highest bid on more than 30 locations. Albertsons owned most of those stores before its merger with Safeway.

Albertsons is in the process of reopening some of those stores under its banner.

At its repurchased stores in Southern California, Albertsons is hiring workers based on their union seniority, according to a statement made by UFCW local 770, the union that represents grocery workers in Los Angeles County.

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