Bashas' Announces More Store Closings; Terminating Leases as Part of Bankruptcy

Bashas' announced the locations today of all 14 stores it plans on closing by October 10.

The family-owned chain filed for bankruptcy last month, but vows to stay afloat as a company and even improve its remaining 130 stores. As the Arizona Republic reported last week, the company is using bankruptcy court to escape expensive real-estate leases.

In the news release below, Bashas' cites threats by a labor union to put the company out of business as one of the reasons for its troubles.

The quip might just be a dig at the United Food and Commercial Workers' union, which Bashas' is suing for defamation. But the UFCW's campaign sure didn't help the business -- and thus, its workers -- in the long run. Among other things, the union was behind an effort to convince Mexicans to boycott Food City stores,

The stores that are closing include:

Bashas': 6720 E. Broadway (Power & Broadway), Mesa

Bashas': 2840 S. Alma School Rd. (Alma School & Queen Creek), Chandler

Bashas': 6760 W. Deer Valley Rd. (67th Ave. & Deer Valley), Glendale

Bashas': 1050 E. Pecos Rd. (Pecos & McQueen), Chandler

Bashas': 4874 S. Val Vista Rd. (Queen Creek & Val Vista), Gilbert

Bashas': 2075 N. Pebble Creek Pkwy. (McDowell & Pebble Creek), Goodyear

Food City: 1245 E. Southern Ave., (Southern & Stapley Dr.), Mesa

Food City: 4344 W. Indian School Rd., (43rd Ave. & Indian School), Phoenix

Food City: 450 S. Country Club, (Broadway & Country Club), Mesa

AJ's: 4975 S. Alma School Road, (Alma School & Chandler Heights), Chandler

4 Grocery Stores Outside of Metro Phoenix

Bashas': 1500 N. Park Dr. (Park & Henderson), Winslow

Bashas': 100 South Houghton Rd. (Broadway & Houghton), Tucson

Bashas': 12100 N. Dove Mtn. Blvd., Marana

Food City: 900 N. Rex Allen Drive, Willcox

Text of news release from Bashas' follows:


Store Closures Part of Hometown Grocer's Chapter 11 Reorganization Plan

ARIZONA - Aug. 10, 2009 - Bashas' Family of Stores, the largest family-owned grocer in Arizona and the 15th-largest privately-held supermarket chain in the nation, announced today that the company will seek court approval to close 14 grocery stores by Oct. 10 of this year.

About a month ago - on July 12, 2009 - Bashas' filed for Chapter 11 reorganization, citing a combination of factors: the national credit crisis, an especially challenging Arizona economy, and the enactment of a threat by the international and local grocery workers' union to drive Bashas' out of business if the company didn't adhere to the union's demands.

"We've been working on a restructuring plan to ensure the long-term survival of our company and to preserve as many jobs as possible," said Mike Proulx, Bashas' president and chief operating officer. "In order for us to be a stronger company, we need to close some more underperforming stores, along with stores in newer areas that just didn't grow or develop."

Under Chapter 11, Bashas' can ask the court to terminate leases and contracts that are seen as detrimental to its survival. So as part of the company's restructuring, a team of internal and external experts has been reviewing every one of the grocer's stores to determine each location's viability - now and into the future.

"We've been taking a long, hard look at each store in many different ways, weighing in a number of factors such as lease agreements, sales volume, store expenses, profit/loss, and overall trade area conditions," said Proulx.

The company is also going to great lengths to try to transfer members (employees) affected by the closings to another company location. "We're working hard to try to place as many members (employees) as possible into another one of our stores," said Edward (Trey) Basha, a senior vice president and Basha family spokesperson.

Bashas' has financial backing and a Debtor in Possession loan for $45 million to continue its operations now and into the future. The grocer plans to emerge from Chapter 11 in the first quarter of next year.

"The decisions we're making (as part of our restructuring process) aren't being made lightly," Proulx said. "We're a people-centered company, but we have to make smart business decisions. We're here for the long haul, and we will rebound. Moving forward, we'll be concentrating our energies and our capital on improving our more than 130 stores in Arizona."