A&P grocery chain has filed for bankruptcy, again, but this time it might be for the last time.
The chain once successfully operated 16,000 grocery stores across the United States. However, today less than 300 are struggling to get by, forcing the chain to look for buyers.
Supermarket chain Great Atlantic & Pacific Tea Co Inc., or as it is commonly known as A&P, has once again filed for Chapter 11 bankruptcy protection. The management has confirmed that it is looking for potential investors or buyers. This is the second time in less than five years that A&P has filed for bankruptcy, but it is likely to be its last.
Despite being a 156-years-old company, A&P has been burdened with dwindling sales and mounting debt. The supermarket chain has been steadily losing business to newer and bigger rivals that have skillfully combined multiple channels that simplified consumption for the average American consumer. Unfortunately for A&P though, which also runs the Food Emporium, Pathmark and Superfresh chains, may soon go extinct.
The New Jersey-based company has revealed it has found buyers for 120 of its stores, reported The Wall Street Journal. It will soon shutter 25 stores. The company is struggling to minimize the gap between what it owes and what can be gained by selling of its assets. According to recent numbers, A&P owns about $1.6 billion in assets, but has to generate about $2.3 billion that it owes. Despite selling off stores and closing a few, there are quite a few A&P stores whose fate appears undecided. Meghan Gavigan, a spokeswoman for the company hasn’t been forthcoming about the details. Even A&P chief executive Paul Hertz just shared the following in a statement,
“After careful consideration of all alternatives, we have concluded that a sale process implemented through chapter 11 is the best way for A&P to preserve as many jobs as possible, and maximize value for all stakeholders.”
A&P could be considered the pioneer of supermarkets. It skillfully built and later expanded the model of “low prices and massive reach”; allowing consumers to buy large quantities at considerably discounted rates, reported The Washington Post. The model and lack of competition in the first half of the 20th century allowed A&P to grow and become a grocery behemoth.
Then came a series of blows including federal anti-trust lawsuits, one of which A&P lost. The company was essentially on the downward path after its leaders George and John Hartford, died, said. Perhaps the reason why A&P failed, besides the bad financial decisions, was because it fell from the common, every day consumer’s active radar.
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