In the same year, it opened its first store-warehouse operation in New York City, according to A&P’s website.
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The Great Atlantic & Pacific Tea Company Inc., which controls the A&P supermarket chain, filed for Chapter 11 bankruptcy protection on Monday and will be closing 25 stores. A&P operates in Connecticut, New York, New Jersey, Pennsylvania, Delaware and Maryland under various names, including PathMark and Waldbaum’s. The 156-year-old chain has stores in six states.
The bankruptcy filing is the second in less than five years for A&P, which is based in Montvale, N.J. The offers will be tested at a bankruptcy auction. In all, A&P has about 28,500 employees, more than 90% of them union members.
“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 Chief Executive Paul Hertz said in a news release.
Stop & Shop said today that it expects to close on the deal to acquire the stores by the end of this year. “We greatly appreciate the continued support of our customers, suppliers and employees, who have maintained an unwavering commitment to our business and our customers”.
The company has retained liquidation specialist Hilco to solicit bids for an additional 150 stores not included in the stalking horse offers. A&P emerged from that bankruptcy in 2012, but it never was able to boost flagging sales or position the company for a sale.
As the grocer bled cash in recent months, some vendors demanded faster payments and threatened to cut off supplies, A&P’s financial advisory firm said in a court filing.
A&P was founded in lower Manhattan in 1859 as a mail-order tea and spice business by merchants George Huntington Hartford and George Gilman.
The Company also announced that it is seeking Court approval to enter into a $100 million debtor-in-possession (DIP) financing agreement with Fortress Investment Group. It was the Walmart of the day, the giant company accused of putting mom-and-pop grocery stores out of business.
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A&P has two loans totaling $270 million, according to data compiled by Bloomberg. Its stores came to seem dated, and the company’s bottom line sagged under labor expenses including high pension costs.
