Irvine Ranch Closes Northridge Store : Bankrupt Costa Mesa Firm May Also Sell 5 Profitable Markets

Irvine Ranch Farmers Market, the upscale grocery chain that filed for protection from creditors last month, has closed its Northridge store and is negotiating to sell five of its remaining 10 Southern California stores.

The bankrupt company--known for its fancy produce and butcher-cut meats--is talking with an unidentified grocery chain operator about selling five of its more profitable markets, said a source familiar with the negotiations.

The five include markets in Tustin, Costa Mesa and the chain’s most successful store at the Beverly Center in Los Angeles. The Beverly Center store typifies the chain’s image as a haven for Westside yuppies with disposable income to spare and a yen for exotic foods ranging from swordfish to sorrel. The source would not identify the two other locations.

Jon Hubbard, founder of the chain, could not be reached for comment Wednesday. His attorney, Marc Winthrop of Irvine, would not confirm or deny the potential store sales but said that selling all or part of the chain are alternatives under consideration.

“We’re looking for an overall solution,” Winthrop said. “The company has received overtures . . . but no decision has been made as to the course to take.”

A major problem facing Irvine Ranch, which has headquarters in Costa Mesa, is that potential buyers have shown little interest in the chain’s less profitable stores.

A deal for the five top performing stores is expected to be reached within a week. The company hopes to then sell the remaining, less lucrative stores to other buyers.

Irvine Ranch has blamed its fiscal problems on an over-rapid expansion. Documents filed in late July in U.S. Bankruptcy Court in Santa Ana listed liabilities of $17.5 million owed to more than 200 creditors, including vendors, lessors and institutional lenders. Revenue in 1987 totaled $82 million, up from $75 million the prior year.

When Irvine Ranch filed for bankruptcy, Hubbard--who owns 80% of the firm--said there were no immediate plans to close stores. But on Aug. 7, the Northridge store--located at 19524 Nordhoff St.--abruptly shut its doors.

Inventory from the store--said to be the worst performer in the chain--was shipped to other markets, and all but a few employees were transferred to Irvine Ranch’s Woodland Hills store, Winthrop said.

“The landlord undoubtedly will file a claim,” he said.

Asked about the prospect for the chain’s remaining stores, Winthrop said the company “is not talking about closing others.”