Some New York residents may remember a time when A&P was their family’s go-to grocery store. Known as the Great Atlantic & Pacific Tea Co, A&P once controlled 4,200 food stores nationwide. That was long ago, in the middle of the last century, before consumers were lured away by Wal-Mart, discount stores and specialty chains.
The Wall Street Journal reported a failure to stay competitive and an unstoppable sales slump forced A&P to file for Chapter 11 bankruptcy in 2012. Plans to revitalize the company didn’t pan out. When A&P filed for Chapter 11 a second time in July, the company had approximately $1.6 billion in assets and about $2.3 billion in debts.
Several familiar food stores are affiliated with A&P, including Pathmark and Waldbaums, with a majority of A&P’s 28,500 member workforce based in the New York metropolitan area. The one-time grocery giant is closing 25 stores by Thanksgiving and selling or attempting to sell the rest – 118 stores have been sold for about $600 million and 153 stores are waiting for buyers.
A&P officials are trying to make the transition as easy as possible for workers. The idea is to have store buyers absorb as many of the grocery employees as possible. According to the president of one of about half a dozen unions linked to A&P, approximately 4,000 workers at A&P stores that have been sold have or will receive job offers; another 3,000 employees may get offers after their stores are sold.
Any number of factors can drive a business toward bankruptcy. A failure to change with the times can be one of them. The Wall Street Journal predicted, even if buyers snap up the remaining stores, none are likely to keep the A&P name.
Reorganization through Chapter 11 bankruptcy can help some companies overcome financial problems. A bankruptcy attorney can help set that process in motion.
Source: New York Post, “Bankrupt grocery-store chain sells stores to save jobs,” Gregory Bresiger, Aug. 29, 2015