An 82-year old gourmet grocery chain, that had aggressively expanded and currently employs 400 people, now seeks Chapter 11 bankruptcy protection, as reported by the Oakland Tribune.
Andronico's Markets plans to keep all of its current seven stores open, and its entire workforce employed, during the bankruptcy.
The grocer, specializing in gourmet food, wine, kitchen accessories and tableware, has claimed to be in talks to sell their stores in full to private investors.
There are currently four stores in Berkeley and single stores in San Francisco, Los Altos and San Anselmo. The Andronico's headquarters are located in San Francisco.
Three generations of Andronico family have owned the stores since Greek-born Frank Andronico founded the company in 1929.
In the Chapter 11 bankruptcy both debts and assets are listed between a $10 million and $50 million range. The bankruptcy was filed in the U.S. Bankruptcy Court in Oakland on August 22.
Bill Andronico, the chief executive of the company said, "This is a bittersweet moment in our history. We have struggled mightily to keep going, but the combination of the economic downturn and a broken balance sheet was too heavy a burden."
Besides talking with a private investor group to buy them out, Andronico's is in negotiations with Renovo Capital to obtain the financing it will need to keep the stores open during the bankruptcy. There have been no assurances so far that the sale of the chain, or the financing, is forthcoming.
Adam Alberti, a public relations representative for Andronico's said, "The markets will stay open and the employees will keep their jobs."
Expansion of Andronico's began in the 1990s with stores in Emeryville, Danville and Walnut Creek. Unable to manage the debt the expansion created, they were forced to close all three of the newer stores: Emeryville in 2004, Danville in 2006 and Walnut Creek in 2006.
Andronico's Palo Alto location was also shuttered this past year.
Robert Reynolds, principal analyst with Reynolds Economics, a company in Moraga that tracks the grocery industry, said, "Andronico's wasn't generating the cash they needed to pay their debt, they have been going backwards for several years."
While Andronico's is suffering, other supermarkets are expanding in the Bay Area: Safeway, Whole Foods, Sprouts and Fresh & Easy.
Reynolds claims that Andronico's was not able to keep up with the competition.
Alberti said, "If the sale is executed, there will be a new owner and they will be evaluating all aspects of the business and making decisions based on what they believe is in the best interest of it. It is too early to comment on what might happen under new ownership."
Andronico's is steadfast in believing that a restructuring plan, yet to be available to the media, will help the company with its crushing debt. When they exit the bankruptcy they plan to keep the name Andronico's intact.
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