Associated Wholesale Grocers (AWG) and its group of grocers and operators submitted the winning bid at Tuesday’s Belle Foods bankruptcy auction, al.com reports. The winning bid was nearly $16.13 million, plus the discounted purchase of the inventories of many of the stores.
As al.com reports: Based on its plan filed as a “stalking horse” bidder with the U.S. Bankruptcy Court for the Northern District of Alabama, AWG and its group of 11 other bidders intend to keep 30 of the 43 remaining Belle Foods stores open. The fate of the other 13 stores—though listed as closed or closing—will be determined by their new owners.
An attorney overseeing the auction said the winning bid was essentially the stalking horse bid with a couple of minor adjustments. The bankruptcy court must now approve the sale.
At least half a dozen bidders were expected to make a play for the Birmingham-based bankrupt grocer’s stores at the closed auction held on Tuesday.
AWG put in its stalking horse bid to help set a minimum bid and ensure subsequent bidding was worthwhile. Apparently no other bidders could top that initial bid. AWG’s bid also includes a set of conditions and requirements that must be met to finalize the sale.
Belle Foods’ primary creditor is C&S Wholesale Grocers, a competitor to AWG in the wholesale grocery business. Belle Foods owes C&S $38.3 million for financing and goods and another $3 million in other claims.
The stalking horse proposal from Associated Wholesale Grocers Inc. shows the proposed fate of the remaining 43 Belle Foods stores.
According to court filings, AWG’s assembled bidders are mostly other grocers, some of which plan to initially close the Belle Foods stores and sell off the inventories before deciding whether or not to reopen them under existing or new names. Belle Foods stores operate as Belle Foods, Southern Family Markets, Piggly Wiggly, Food World and Bruno’s.
The stores closed or closing are:
• Gulf Shores, Spanish Fort, Saraland, Theodore and two Mobile locations (South University and Old Shell Road) that Rouses Enterprises will buy and liquidate.
• Enterprise, Ala., and Albany, Ga., that AWG will buy and liquidate.
• Brewton, Ala., and Columbus, Miss., that Food Giant Supermarkets Inc. will buy with plans to sell the assets of the Brewton store to AWG and liquidate the Columbus store.
• Griffin and Athens, Ga., that HAC Inc. will buy and liquidate.
• Rainbow City, Ala., that Mitchell Grocery will buy and liquidate.
The remaining 30 stores in the stalking horse deal will remain open by different operators.
Two of the stores (Hoover and Tuscaloosa) will be purchased by 4Wall LLC with the name “Bill White” beside it. The filing does not make clear if it is the same Bill White that founded, led and filed bankruptcy as the chief executive of Belle Foods. Incorporation papers for 4Wall LLC were filed with Alabama via Legalzoom on Sept. 13 with no individuals listed in the filing.
Other buyers that will operate stores as part of AWG’s stalking horse bid are:
• HAC Inc.—Georgia stores in Monroe, Dawson, Milledgville (North Columbia and Wane Street stores), Macon, Cochran, Eastman, Gordon, East Dublin and Warner Robins, along with the Troy, Ala., store.
• Triple V—Three stores in Tuscaloosa and one in Meridian, Miss.
• Mitchell Grocery—Stores in Alabaster, Scottsboro, Florence, Decatur, Muscle Shoals and Atmore, Ala.
• Ramey Enterprises—Stores in Luverne and Atmore, Ala.
• Food Champs LLC—Stores in Mobile on Dauphin Island Parkway and Dauphin Street.
• Greers—A Mobile store.
• Hometown Grocers (Holloway)—An Athens, Ala., store.
• R&R Foods (Ramey)—A Starkville, Miss., store.
• A buyer to be determined will keep one of the Athens, Ga., stores open.
The buyers in AWG’s stalking horse deal have agreed to buy at least portions of the inventory in the stores at varying discounts off the retail prices. Groceries will be purchased at a 70 percent valuation, frozen foods and dairy at 60 percent, meats at 55 percent, produce at 50 percent, alcohol and tobacco at 80 percent, health and beauty care at 50 percent, seafood at 50 percent, floral at 40 percent, general merchandise at 40 percent, greeting cards at 25 percent, floral at 40 percent, deli at 45 percent, bakery at 35 percent and generic brands at 25 percent.
Belle Foods had 2,850 employees, approximately 34 percent full-time, at the time of the bankruptcy filing, though some stores have closed and most corporate employees have since lost their jobs. The company said it had 2,141 union employees in collective bargaining agreements with United Food and Commercial Workers 1996 and 1529 and the Retail, Wholesale and Department Store Union. Belle Foods had 738 non-union employees.
The negative publicity from the bankruptcy filing has not been good for sales, according to al.com. In a report filed with the bankruptcy court last week, Belle Foods said that between July 28 and Aug. 24, it had total sales of more than $23.3 million but after expenses ended up losing nearly $1.5 million for the month.