CARTER'S CLOSES, PLANS LIQUIDATION

MARK HAMSTRA

CHARLOTTE, Mich. - Carter's Food Centers here has filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court for the Western District of Michigan.

The company said in its filing that it has been unable to repay a loan to its grocery supplier, Minneapolis-based Nash Finch, and that Nash Finch has refused to deliver it any more product.

The 14-store chain had recently shut down all of its stores and was ordered to repay nearly $1 million to J.A. Besteman, a local produce supplier.

In the bankruptcy filing, Carter's listed assets less than $10 million and estimated debts of between $10 million and $50 million. Under Chapter 7, the company would sell its assets and divide the proceeds among its creditors.

According to Robert Fruchey, a manager at one of the supermarkets whose family also owns the property at three Carter's locations, Carter's leases 12 of its sites and owns two. Nash Finch was the leaseholder at several Carter's locations and also loaned the company money in 2000 to fund its employee buyout.

Nash Finch last month said it would take a second-quarter charge of up to $8.5 million to reflect the obligations of a customer, which it declined to identify but appears to be Carter's.

An analyst recently told SN that Spartan Stores, Grand Rapids, Mich., may be interested in some of the Carter's locations. Fruchey said Spartan had offered to become his supplier if he chose to reopen his store in Beaverton, Mich., where he had been manager since he sold it to Carter's several years ago.

"Some of the stores were doing pretty well, but I guess it wasn't enough to make up for the ones that were not doing so well," said Fruchey.

He said store managers had been told early this month to stop ordering new product and were finally forced to close last week.