Haggen announces plan to close more than 100 stores, including Burbank location

It took about 40 hours for the Albertsons on Verdugo Avenue and Hollywood Way in Burbank to become a Haggen grocery store in late April, after the Bellingham, Wash.-based grocery chain took over 146 grocery stores throughout California, Washington, Oregon, Arizona and Nevada.

Not quite as quickly but still in rapid fashion — less than 150 days later — Haggen has announced plans to exit the Pacific Southwest and “realign its operations” in Washington and Oregon around 37 stores, including 16 original locations and 21 acquired from Albertsons, as well as a stand-alone pharmacy, according to a company statement.

“These identified stores will have the best prospect for ongoing excellence,” Chief Executive John Clougher said in the statement. “Although this has been a difficult process and experience, we will remain concentrated in the Pacific Northwest, where we began.”

A list provided by Haggen shows the Burbank location as one of the stores scheduled to close in the next 60 days.

The company said Thursday that the move, which would affect 127 stores, including 83 in California, is part of a bankruptcy process that began earlier this month when company officials filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware.

Company officials said this week they are asking a bankruptcy court to approve closing sales of the non-core stores.

The withdrawal follows a rapid but rocky expansion from an 18-store chain with 2,000 employees into a 164-store regional operation with 10,000 workers, through the acquisition of Albertsons, Vons, Pavilions and Safeway grocery stores. Albertsons and Safeway were forced by the Federal Trade Commission to sell the stores to allow a merger.

The dust had barely settled on the transformation of the stores when, in July, Albertsons filed a $36-million suit alleging Haggen had failed to pay for inventory as part of its purchase of the stores.

Customers didn’t seem to warm up to the new Haggen stores, with some complaining the prices had gone up, though the products remained the same.

In August, company officials announced the planned sale or closure of 27 stores, including 16 in California, “in order to continue to improve its business and strengthen its competitive position.” They noted then that its original stores were continuing to perform well.

And earlier this month, the Pacific Northwest chain sued Albertsons, accusing the grocer of “unfair and anti-competitive conduct” meant to eliminate Haggen as a competitor in the region.

Days later, Haggen announced its bankruptcy filing and the replacement of Bill Shaner, the company’s executive in charge of the Pacific Southwest region. Haggen said it had received as much as $215 million in financing commitments from its existing lenders to keep its operations running.

All employees of the stores and the company’s support office in the region will get 60 days notice of the pending closures. The stores will remain open and employees will continue to receive pay and benefits during the process, the company said.

Haggen also said it is continuing to work with Albertsons on a request for the FTC to waive a restriction against Albertsons the hiring of Haggen employees. The waiver will require commission approval, which Haggen said the federal agency’s staff is seeking on an expedited basis.

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Chad Garland, chad.garland@latimes.com

Twitter: @chadgarland