A&P Grocery Store Chain Files for Bankruptcy for Second Time

© Getty Images A&P Files For Bankruptcy Protection.
© Getty Images A&P Files For Bankruptcy Protection.

Storied supermarket chain Great Atlantic & Pacific Tea Co Inc, better known as A&P, filed for Chapter 11 bankruptcy protection for the second time in five years and said it was in discussions with buyers for some of its stores. 

The 156-year-old company has hired Evercore Partners, an investment bank that specializes in selling assets. A&P listed assets and liabilities each of more than $1 billion in its bankruptcy filing late Sunday.

The company said was in talks with Acme Markets Inc, owner of Safeway and Albertsons grocery stores, Shop & Shop Supermarket Co LLC and Key Food Stores Co-operative Inc to buy its assets.

A&P has lined up buyers for 120 of its 296 stores with total expected proceeds of about $600 million, the Wall Street Journal reported, citing a person familiar with the matter. (http://on.wsj.com/1IdpCQZ)

The company, which also owns Best Cellars, Pathmark and Superfresh stores, has been unable to stand up to behemoths such as Wal-Mart Stores Inc and Costco Wholesale Corp who entice customers with big discounts.

At the same time, wealthier shoppers have been lured away by higher-end stores such as Whole Foods Market Inc.

A&P has received debtor-in-possession financing of $100 million from Fortress Credit Corp, court documents show.

The Montvale, New Jersey-based company employs about 34,000, according to its website.

A&P, which in its heyday in the early 20th century operated over 15,000 stores, first filed for bankruptcy protection in 2010, re-emerging two years later as a private company after obtaining financing from investors including Goldman Sachs and an affiliate of billionaire Ron Burkle. (http://reut.rs/1CDqC0k)

The company was founded as a mail order business in 1859 by tea and spice merchants George Huntington Hartford and George Gilman. In the same year, it opened its first store-warehouse operation in New York City, according to A&P’s website.

The case is in U.S. Bankruptcy Court, Southern District of New York, Case No: 15-23007. (Reporting by Supriya Kurane and Yashaswini Swamynathan in Bengaluru; Editing by Anupama Dwivedi and Joyjeet Das)

Source: Reuters

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s