Farmers Market Chain Closes 2 Stores, Sells 1
Irvine Ranch Farmers Market--the upscale grocery chain that filed for bankruptcy protection from creditors--has closed two more stores, sold a third and is negotiating to sell at least one more, according to lawyers close to the case.
Furthermore, the bankrupt company would be willing to sell all of its remaining stores in Orange County “for the right price,” said Marc Winthrop, the Irvine attorney who represents Irvine Ranch. That would leave two Southern California stores remaining in the chain--at the Beverly Center in Los Angeles and in Woodland Hills.
Jon Hubbard, who founded the chain as a roadside stand 20 years ago, no longer works for the chain. One lawyer familiar with Irvine Ranch said that the upscale grocery chain’s creditors would not accept Hubbard’s continued involvement with Irvine Ranch.
Hubbard could not be reached for comment Wednesday.
The Costa Mesa-based chain filed for protection from its creditors under federal bankruptcy laws in July, listing liabilities of $17.5 million. At the time, Irvine Ranch had 11 Southern California stores, including seven in Orange County.
Since the bankruptcy filing, the chain has been operating under protection of the U.S. Bankruptcy Court. Three months ago, Tribu Inc., the parent of Chalet Gourmet in Los Angeles, bought Irvine Ranch’s stock and took control of the company.
On Saturday, Tribu took the first steps toward an apparent drastic reduction in Irvine Ranch’s Orange County operations. The stores in Mission Viejo and Yorba Linda were permanently closed after sustaining losses that were “intolerable,” Winthrop said.
For the Mission Viejo store, an exceptionally high lease rate of $1.50 per square foot apparently led to the operation’s downfall.
“That’s far above what it’s worth,” said Ron Rus, the Orange attorney who represents the Official Committee of Creditors. Moreover, the opening of a Vons store nearby apparently hurt the Mission Viejo operation’s sales.
The Yorba Linda store was in a bad location with poor access, case attorneys said.
Rus said the Costa Mesa store has been sold to the site’s landlord, pending approval from the U.S. Bankruptcy Court in Santa Ana.
And in San Diego, the Irvine Ranch name has been taken off the store in Horton Plaza. That store had been managed but not owned by Irvine Ranch and came under new management last month.
Attorneys involved with the case said they did not know whether employees of the closed stores were laid off or transferred to other stores. On Wednesday, some employees were still moving inventory from the Mission Viejo and Costa Mesa operations to other Irvine Ranch stores.
The closures apparently are far from the end of changes in store for Irvine Ranch.
Irvine Ranch is negotiating to sell its store in Orange, still one of the more profitable operations of the chain. Case attorneys said that Pacific Ranch Market, which owns and operates three county grocery stores, is interested in the Orange location.
In October, Pacific Ranch Market took over operation of the enormously popular Irvine Ranch site at Atrium Court in Newport Center/Fashion Island. The Atrium Court operation--which is often crowded with noontime diners in its indoor, airy pavilion--has been operating as Farmers Market at Atrium Court since Pacific Ranch bought the Newport Beach operation.
Shortly after filing for bankruptcy, Irvine Ranch closed its Northridge store.
If the sale of the Orange and Costa Mesa stores are completed, it would leave only two Irvine Ranch stores in Orange County: in Tustin and in Irvine. But according to case attorneys, Irvine Ranch is willing to sell those, as well--provided a buyer offers “the right price,” Winthrop said.
“What’s going on is the shedding of the dead weight of the corporate structure,” Rus said. “The value of the corporation is in operating its primary asset--and that’s the Beverly Center store” in Los Angeles.
Daniel Bobroff, owner of Chalet Gourmet who was instrumental in the purchase of Irvine Ranch, could not be reached for comment.
