Haggen Grocery Store Chain Files For Bankruptcy In Wake Of SoCal Expansion Effort

LOS ANGELES (CBSLA.com/AP) — Just months after making its Southland debut, the small grocery-store chain Haggen has filed for bankruptcy.

Chief Executive John Clougher said the reorganization will allow the Pacific Northwest-based Haggen to continue to operate while enabling the grocer to "re-align" its operations, according to the Associated Press.

Creditors have committed up to $215 million to keep the company running while it sells stores.

The struggling grocer, which went from a family business to a West Coast power virtually overnight after buying 146 stores from Albertsons, released a statement saying it would focus on profitable core stores while in talks to sell many of the company's remaining assets.

More than 80 new stores throughout Southern California were scheduled to open this year following the opening of a location in Burbank at the end of April on a site that was an Albertsons supermarket just 48 hours prior.

The company announced layoffs in July due to apparent struggles in its expansion effort.

Kyle Mayer, a professor of strategy with the USC Marshall School of Business, said Haggen bought too many stores too quickly.

"Bad first impression, not much marketing, and let's not neglect the fact that Southern California is a brutally competitive grocery store area," he said.

Earlier this month Haggen sued Albertsons for more than $1 billion in damages, alleging the supermarket giant engaged in systematic efforts to eliminate it as a viable competitor in five states.

The lawsuit, filed in federal court in Delaware, accused Albertsons of anti-competitive practices.

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