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C&K Files Voluntary Chapter 11 2013-11-25
BROOKINGS, Ore. — C&K Market here said last week it has filed a voluntary petition for Chapter 11 bankruptcy protection to address legacy costs, sell or close underperforming stores and resolve debt issues.
Elliot Zwiebach
November 25, 2013
3 Min Read
BROOKINGS, Ore. — C&K Market here said last week it has filed a voluntary petition for Chapter 11 bankruptcy protection to address legacy costs, sell or close underperforming stores and resolve debt issues.
In a statement on its website, the family-owned chain said it suffered from competition from larger chains.
“Traditionally, we’ve focused on serving people in small, rural towns throughout Oregon and northern California,” the company said. “As competition increased from larger grocers and mega-stores, more people left their communities to shop in those stores. Sales declined in some of our stores, forcing us to realize that we could no longer operate profitably in some markets.
“Selling or closing about a third of our stores was a difficult, but necessary, move to ensure our viability, and will allow us to continue serving as many customers as possible.”
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C&K operates 60 stores under the Ray’s Food Place, Shop Smart, C&K Market and LoBuck$ banners.
In filings with the bankruptcy court, C&K said most of its stores are within 40 miles of “a large discount grocery operation such as Wal-Mart or Costco,” and added that about 30 Walmart Supercenters have opened near its stores in the last year. “As a result of the evolving marketplace, several of C&K’s stores are no longer viable.”
The company said it plans to seek court approval of a debtor-in-possession financing facility with U.S. Bank and expects to continue operating “as normal” as it develops a reorganization plan throughout the bankruptcy process.
According to Doug Nidiffer, chairman of C&K, “Entering Chapter 11 was a difficult decision for our family. We seriously considered our options and believe this approach is in the best interests of many of the communities we’ve served over the years.”
In addition to selling or closing a third of its stores — 16 locations slated for closure were reported by local media last week — C&K said it is tightening its corporate structure and shedding legacy costs. The company said legacy costs include leases on stores that have been closed over the years.
Read more: C&K to Sell Pharmacies
Gregory L. Sandeno, president, said the company expects to eliminate approximately 20% of its workforce. “The positive news is that we will put our energies into the remaining stores and intend to emerge from bankruptcy as a stronger, leaner company.”
The company said last month it was selling its 15 freestanding pharmacies as part of an effort to focus on its core supermarket business, with all sales due to be completed by mid-November. At the time the company said the decision to sell the pharmacies came as part of a larger strategic review that had been going on for several months.
In its filings, it listed wholesaler Supervalu as one of its creditors. It listed debts of more than $100 million and assets of $10 million to $50 million.
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