DALLAS -- Fleming here said last week it was poised to take ownership of Furrs Supermarkets in New Mexico and west Texas following an auction.
Chapter 11 since February.
Fleming said Furrs accepted its bid of $57 million for the real estate and inventories of the 66 Furrs stores at the auction, which was held last Wednesday at the retailer's offices in Albuquerque. It did not bid on the chain's warehouse -- a former Fleming facility in El Paso, Texas, that Furrs purchased in 1998.
Furrs officials could not be reached for comment. A chain spokesman told the Associated Press that bids other than Fleming's had been received during the auction but that none of them was superior to Fleming's.
A Fleming spokesman told SN the company plans to operate 10 of the stores as corporate locations and convert them to a price-impact format while spinning off the other 56 locations to independents and chain operators, who would use Fleming as their supplier at those stores.
Trade sources said the bankruptcy court judge allowed the auction to proceed last week without acting on objections from some of the company's creditors, who said the auction procedure had been on a fast track. The company reportedly argued that interested parties had been notified June 1 of the auction and had adequate time to participate.
Fleming was Furrs' primary wholesaler until 1998, when Furrs began self-distributing after purchasing the El Paso facility. Fleming gave up a 30% equity position in Furrs last summer.
According to Steve Davis, executive vice president and corporate president, wholesale, "Fleming has a strong track record of successfully facilitating the transfer of stores from regional chains into the hands of quality independents and chain supermarket operators. "Rather than see all of these stores liquidated and closed, this plan offers a growth solution. We believe this is the best use of the properties and the best opportunity to preserve jobs and shopping alternatives in the communities where these stores operate."