OPERATOR WANTS CARTER'S STORES BACK

MARK HAMSTRA

CHARLOTTE, Mich. - A small retailer is battling to take back the three stores it sold to Carter's Food Centers here five years ago now that the 14-store chain is going through a Chapter 7 bankruptcy.

Fruchey Foods, a family-owned company whose principals had been managing three Carter's stores in Edenville, Gladwin and Beaverton since it sold them to Carter's in 2001, claims that as the landlord for the stores it has the rights to operate them as it had before Carter's went out of business.

"They are young, and they want to reopen those stores," said Ray Zillgitt, an attorney with Willingham & CotT, East Lansing, Mich., which is representing Fruchey.

But Minneapolis-based Nash Finch, which had been Carter's grocery wholesaler and had financed Carter's employee buyout in 2000, was pushing the court to seek more bids for those stores, Zillgitt said. Nash Finch could not be reached for comment.

Fruchey has been contacted by Spartan Stores, Grand Rapids, about supplying the three locations, according to Zillgitt.

"I think there's a good chance they could become Spartan stores," he said.

Spartan's Family Fare subsidiary also bid $1.1 million for five other Carter's locations in Lake City, Houghton Lake, Gaylord, Boyne City and Oscoda. A Spartan spokeswoman told SN last week that it could be "a week or two" before the court rules on the bid.

Other bidders on the Carter's locations include G&R Felpausch Co., Hastings, Mich., which offered $460,000 for stores in Charlotte and Kimball, and Tom's IGA, which bid for a store in Onaway.

Zillgitt said as of early last week no other bidders had emerged for the three stores Fruchey is seeking to buy.

"We are saying that the only way someone is going to buy those assets is if they pay us for the [furniture, fixtures and equipment], beat our bid and cure all the arrears on the lease," he said, noting that Carter's owed Fruchey about $50,000 in back rent.

Fruchey bid based on the cost of the remaining inventory.

"If someone outbids us on the inventory, that's fine," he said. "They can come and take it away."