BIRMINGHAM, Ala. -- Bruno's here said last week it expects the U.S. Bankruptcy Court in Delaware to hear its motion today seeking a two-month extension for submitting a financial restructuring plan. T
> The spokeswoman told SN last week extensions are not unusual "in a complex bankruptcy case, and we want to be sure all strategies are explored."
She added the chain's creditors' committee does not plan to object to the extension. Bruno's operates 164 stores in Alabama, Mississippi, Florida and Georgia and has been operating as a debtor-in-possession under Chapter 11 since Feb. 2, 1998. The company's sales are estimated at $1.85 billion for the year ending Jan. 31, compared with $2.6 billion for the 219 stores it operated a year ago.
Bruno's filed for Chapter 11 protection after failing to make a $21 million interest payment. In the filing the chain listed assets of $780.8 million and liabilities of $1.2 billion.
At the time of the filing the company said it had obtained a $200 million debtor-in-possession financing facility from Chase Manhattan Bank to build new stores and remodel or expand existing units and to increase staff levels to achieve better customer service.
Observers told SN Bruno's problems stemmed from overleveraging and from a shift away from everyday low pricing to a high-low promotional approach, which caused customer unrest.
Bruno's majority shareholder is Kohlberg Kravis Roberts & Co., New York-based investors, which bought into the company in May 1995 for about $930 million, including $250 million of equity.
Bruno's has been selling and closing stores for the past year to improve its financial and operating position.
Early last year it sold 13 stores in Georgia to Ingles Markets, Black Mountain, N.C., and 10 Seessel's Supermarkets in Memphis, Tenn., to Albertson's, Boise, Idaho; in August the company sold 14 more stores in Tennessee and Georgia to Albertson's while seeking buyers for 10 other units and closing 10 more.
