Days after Lucky’s Market officials announced the closure of 32 stores nationwide, including one in Springfield, the company filed for Chapter 11 bankruptcy reorganization.
The Boulder, Colorado-based natural foods grocer announced the legal action Jan. 27, and it’s punctuated by an asset purchase agreement with Germany-based Aldi and Florida-based Publix Super Markets Inc. Lucky’s Market officials confirmed the company would continue with efforts to close most of its 39 stores nationwide.
Troy Carson, store director for Lucky’s Market Springfield, said the 2-year-old store would shutter by Feb. 12 or until supplies last. Carson said the local store, which employs 75, does not anticipate any more product shipments.
“We love serving Springfield and wish we could continue taking care of this town,” Carson said, declining to comment further.
Lucky’s Market offers organic, local and gluten-free items, an in-house bakery and butcher, and smoothies, juices, coffee, beer and wine for customers to drink while shopping. The local store opened in 2018 in the Glenstone Marketplace, anchored by HomeGoods and Designer Shoe Warehouse.
The planned exit of Lucky’s Market leaves MaMa Jean’s Natural Foods Market and Akin’s Natural Foods as the primary natural grocers in Springfield.
“We’re glad to get some more customers but hate for it to be this way,” said MaMa Jean’s co-owner Susie Farbin. “We know how much hard work it is to establish a business ... and the loss of jobs for those people.”
Lucky’s Market officials are in talks to sell 11 of its stores to Aldi and Publix Super Markets, according to a news release.
But the relief is focused in Florida, where Lucky’s Market has 20 stores.
Maria Brous, spokeswoman for Publix Super Markets, said via email the Florida grocery chain is under contract to purchase five Lucky’s Market leases in Orlando, Clermont, Naples, Ormond Beach and Neptune Beach in the Sunshine State. Publix owns and operates over 1,200 stores across the Southeast, according to its website.
Representatives of Aldi, which operates nearly 2,000 U.S. stores, said in a statement provided to Springfield Business Journal the company was “acquiring several” of the Florida stores, but no further information was made available at the time.
On Jan. 29, Lucky’s Market announced an asset purchase agreement of the seven remaining stores to a group led by the grocery chain’s founders, Bo and Trish Sharon.
One Missouri store, in Columbia, was spared from the closure plan, along with others in Fort Collins and North Boulder, Colorado; Traverse City, Michigan; Melbourne, Florida; and Cleveland and Columbus, Ohio.
In its bankruptcy petition, Lucky’s Market listed assets and liabilities of at least $500 million each. Officials indicated in the release the company has enough cash on hand and an agreement for the use of cash collateral.
“The company should have the continued ability to meet its financial obligations, including those to its employees, as well as to vendors for the continued supply of product to its operating locations,” Lucky’s spokeswoman Krista Torvik said in the release.
While Lucky’s Market officials have yet to cite a reasoning for filing bankruptcy, industry website Progressive Grocer pointed to The Kroger Co. (NYSE: KR) deciding to divest its $131 million interest in the company in December 2019.
Torvik did not return requests for comment on the Springfield store’s financial status.
With a national chain leaving Springfield, Farbin said MaMa Jean’s is feeling the impact.
“We’ve already seen a little bit of an increase in our customer count,” she said. “We’ve had a lot of people already requesting some favorite items they stocked that we didn’t.”
MaMa Jean’s offers local, organic and natural foods at four stores in Springfield.
Farbin said her stores didn’t see much of a hit when the Colorado chain opened shop in 2018. Instead, she said having a chain presence brought more awareness to the natural food industry – a consumer trend felt nationally.
According to data from the U.S. Department of Agriculture, organic products are now available in nearly 20,000 natural food stores and 3 out of 4 conventional grocery stores nationwide.
Industrywide, the Organic Trade Association, which conducts an annual organic industry survey, listed 2018 organic market sales at $52.5 billion – up 6.3% from the prior year.
Mary Ann O’Dell, spokeswoman for Akin’s Natural Foods, said the Tulsa-based company specializes in supplements and healthy lifestyle products, while also offering organic and natural produce. She said employees at the store in the Fremont Center on Battlefield Road are tasked with teaching customers healthy lifestyle habits.
“People view their health as a necessity, not a luxury, so, I think people prioritize their health,” O’Dell said. “That creates a demand for healthy living products.”
The Lucky’s Market planned closure comes a little over a year after Ruby’s Market shuttered on East Sunshine Street. It closed 11 months after Lucky’s Market opened in 2018. Officials with Ruby’s Market, owned by Springfield-based Pyramid Foods, cited the location as a key factor to its closure at the time, according to past SBJ reporting. Aldi and Red Racks Thrift Store have since opened in the former Ruby’s building.
Other grocers such as Walmart, Aldi and Hy-Vee also have brought in organic produce, though Farbin said she isn’t concerned by the chain store competition. She said MaMa Jean’s is trying to keep up with trends by increasing product selections for keto and plant-based diets, as well as offering curb-side grocery pickup and delivery.
“The natural food market in general is a tough market,” Farbin said. “I think the commitment we have to our customers has really resonated with them – being 100% organic and fresh.”
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