Two well-known Southern California-based Hispanic retailers—Cardenas Markets and Northgate Gonzalez Markets—said this morning they have come together and reached an agreement with the U.S. Bankruptcy Court to purchase Phoenix, Ariz.-based Pro’s Ranch Markets, which has seven stores in Arizona, two in New Mexico and two in Texas, for $55 million. The two retailers recently formed a separate LLC—Cardenas Northgate Group Ranch (CNG Ranch LLC)—to acquire and operate Pro’s Ranch Markets. Pro’s Ranch Markets filed for Chapter 11 bankruptcy reorganization in May 2013.
“We are confident that Cardenas’ and Northgate’s financial strength, supply chain structure and commitment to family values and integrity will reenergize these stores, and allow them to continue providing the wide range of products, high-level of customer service and competitive prices that Pro’s Ranch customers have come to expect. We believe we can build upon the legacy of well-established values and the strong market presence that Pro’s Ranch is known for. This is a win for everyone—customers, employees, neighborhoods and families,” said Northgate Gonzalez Markets Co-President Oscar González Reynoso.
As part of the transaction, CNG Ranch also will obtain the use of the Pro’s Ranch Markets corporate office (adjacent to one of the Phoenix stores) and a 151,000-s.f. warehouse in Phoenix. Operationally, Northgate’s team will take the lead, providing overall management and direction for daily operations, all under the supervision of the CNG Ranch’s board of directors that includes members from both the Cardenas and Northgate organizations.
For the foreseeable future, all 11 Pro’s Ranch Markets’ stores will remain open while CNG Ranch assesses the operational needs and brings together the operations of the new organization. CNG Ranch will work closely with Pro’s Ranch Market’s existing management team to “ensure that customers, vendors and the communities in which the stores serve continue to receive the quality products, fine service and excellent prices that customers have come to expect over the last 31 years,” according to the company.
“Even though Pro’s Ranch has experienced a number of operational and financial difficulties over the last few years, it has continued to foster a fiercely loyal customer base—one that took years to develop—and was even voted Arizona’s Retailer of the Year in 2012,” said Jesus Cardenas, president of Cardenas Markets. “On behalf of both the Cardenas and González families, we recognize the loyalty and patience of the 2,500 Pro’s Ranch employees and are happy to provide some closure and peace of mind for them moving forward.”
Cardenas Markets currently owns 26 stores in California and three in Nevada. Northgate Gonzalez Markets operates 38 stores in California. Both retailers have future plans for growth, as the buying power of Latinos continues to increase annually, according to HispanTelligence, a data company specializing in identifying trends. It also reports that the Latino market is one of the fastest-growing segments of the U.S. economy. In 2012, Latino consumers accounted for $1.2 trillion in purchasing power and is projected to reach $1.5 trillion in 2015.
“We are very pleased that two of the most successful Hispanic grocery store chains in the United States, Cardenas Markets and Northgate Gonzalez Markets, will be acquiring our stores,” said Pro’s Ranch Market EVP and CFO Michael Provenzano. “These are two fine operators with whom we have had a 20-year relationship. It’s a win-win for everyone.”