Ralphs Stores Not Affected by Sister Firms’ Bankruptcy

Ralphs Grocery Co. will not be affected by the bankruptcy filings of sister companies Allied Stores Corp. and Federated Department Stores Inc., company spokesmen said Monday.

Executives of the Southern California supermarket chain say that Ralphs is insulated from the financial problems that have beset Toronto-based Campeau Corp. and its Allied and Federated subsidiaries, which filed for protection under Chapter 11 of U.S. bankruptcy laws on Monday. Ralphs was not included in the filings.

“Nothing will change in our stores,” said Byron Allumbaugh, Ralphs’ chairman. “We are in a very strong, independent position. To our customers, we will look the same.”

Campeau, which acquired Ralphs as part of its 1988 takeover of Federated, owns Ralphs’ common stock through its subsidiaries. But Ralphs, which was spun off from Federated, has its own debt, lines of credit and corporate structure, which allow it to stand alone from the rest of Campeau and its affiliates.

As a result, Allumbaugh said, the grocery company does not need funds from Campeau, and Campeau and its affiliates are prohibited from removing any funds from Ralphs.

Last week, Ralphs executives denied rumors to a group of 400 suppliers that the supermarket chain was about to file for bankruptcy protection. Allumbaugh told the suppliers that Ralphs cut its losses from $72.6 million in fiscal 1988 to about $31 million in fiscal 1989, which ends on Jan. 28.

The company projects a net loss of $7 million in the coming year, followed by a $17-million profit in fiscal 1991.