It appears that ShopRite will be increasing its presence in a major way in the Baltimore-Washington market after reviewing the results of an auction for 25 Super Fresh/A&P stores was held on May 18.
Village Super Markets based in Springfield, NJ, which is the second largest Wakefern member with 26 stores, along with a Canadian based natural food retailer – Mrs. Green’s Natural Markets – jointly bid successfully on 10 stores, while Shoppers Food & Pharmacy (a division of Supervalu bid successfully for the Super Fresh store in Ellicott City, MD and Englar Center LLP, the landlord of the Super Fresh unit in Westminster, MD offered the highest bid at auction for that site.
Sources said that A&P could gain about $45 million from the leases that were sold at the auction.
While the joint Village/Mrs. Green’s bid was received as one bundled offer, here’s how we believe the stores will be divided: 41st St. in Baltimore City; Parkville, MD; Silver Spring (White Oak, MD); Cambridge, MD; Chestertown, MD; Brunswick, MD; and Timonium, MD will flow to Village; while smaller sized units on Charles St. in Baltimore City; Arnold, MD and the lone Washington, DC store will become Mrs. Green’s Natural Markets.
ShopRite (Wakefern) entered the Maryland market in 2008 when the seven store Forest Hill, MD Klein’s group joined the co-op and converted its stores to the ShopRite banner. Last year, Philadelphia based Collins Family Markets opened an 85,000 square foot former Kmart in Glen Burnie, MD as a ShopRite and next year, Klein’s and another Philadelphia area based Wakefern member Jeff Brown (Supermarkets of Cherry Hill) will combine forces to open a brand new 65,000 square foot urban supermarket in the Howard Park area of Baltimore City. Additionally, Wakefern opened its first corporately-owned “extreme value” PriceRite in March on Security Blvd. in Baltimore.
Mrs. Green’s Natural Markets, a natural/organics retailer which currently operates 12 stores in the Westchester County, NY and Fairfield County, CT areas. It is owned by Canadian health food company, Planet Organic, based in Edmonton. In addition to operating eight natural foods supermarkets in Canada under the Planet Organic Natural banner (and the Mrs. Green’s and New Leaf stores in the U.S.), the company also operates 48 natural health stores in Canada under the Sanger’s Health Centre banner and eight related stores under the Healthy’s and Planet Organic Living banners.
Not all stores were bid upon at auction and those successful bidders still need final bankruptcy court approval which is expected to occur at a hearing on June 14. Clearly, there will be at least one more round of store “action” to determine what occurs with the stores that received no bids at the May 18 auction. Also, expect Super Fresh landlords who want to control their leases, to become more involved during the next round.
The auction was held at the Manhattan offices of Kirkland & Ellis, A&P’s legal firm.
About 10 days prior to the auction, A&P announced that it would exit Maryland, Washington DC and part of Delaware when it closes and/or sells those 25 Super Fresh stores. Although the sale process was announced first, the final exit strategy become official when A&P sent WARN (Worker Adjustment and Retraining Notification) notices stating it will close those 25 stores in 60 days (July 6). About 1,500 associates will be affected.
“As part of our ongoing review of our store footprint, we determined that these 25 Super Fresh locations are outside A&P’s core market,” Sam Martin, chief executive officer of A&P, said in a statement. “While the decision to put these non-core stores up for sale will unfortunately impact some of our customers, partners, communities and associates, this is a necessary step in our efforts to restore the company to long-term financial health.”
The total store list included Super Fresh units based in Baltimore City (222 North Charles St. and 1020 West 41st St.); Washington, DC (4330 48th St. NW); Arbutus, MD; Woodlawn, MD; Rosedale, MD; Mount Airy, MD; Towson, MD; Perry Hall (Nottingham), MD; Ellicott City, MD; Elkridge, MD; Timonium, MD; Odenton, MD; Glen Burnie, MD; Arnold, MD; Parkville, MD; Westminster, MD; Frederick, MD; Brunswick, MD; Silver Spring, MD; Chestertown, MD; Cambridge, MD; Salisbury, MD; Dover, DE; and Milford, DE.
Two Super Fresh stores in Ocean City, MD and the company’ s high volume unit in Rehoboth Beach, DE will remain open (the Super Fresh store in Ocean City’s Gold Coast Mall closed several months ago). The disposition of many other A&P retail properties in Delaware, Pennsylvania, New Jersey and New York is likely to be determined later this year by the bankruptcy court.
The stores that are slated to close or be sold have actually been on the sales block for nearly nine months. However, after A&P filed for Chapter 11 bankruptcy protection on December 12, the sales process was farmed out to a Chicago-area real estate firm, Hilco, which has been active in soliciting bids from interested parties and helped organize the auction.
It appears that A&P’s next step is to file motions in U.S. Bankruptcy Court seeking approval of the auction “winners” at the June 14 hearing.