Phoenix, AZ – A major statewide grocery chain is seeking protection from
creditors today in bankruptcy court.
In filings early this morning, Bashas' listed about $200 million
in assets -- and about $245 million in debt. Company president
Mike Proulx said the state's soft economy is taking its toll.
(Arizona goes from back in the day from a couple of years, three,
four years ago, from one of the fastest growing states in the
nation to stagnant growth.)
The tight national credit market also has made it harder to get
operating cash. But Proulx said the plan is not to liquidate but
simply restructure, giving the company some financial breathing
room. Bashas already has obtained what is known as debtor-in-
possession financing. Potentially more important, bankruptcy will
allow the company to force landlords to renegotiate expensive
leases -- or break leases entirely at underperforming stores.
Proulx said he believes Bashas can surive, even with stiff
competition from Wal-Mart, Safeway and Frys.
(We have the opportunity to develop a short-term and a long-term
plan that will help us strengthen our operations, certainly
strengthen our balance sheets, and improve our cash flow
positions to allow us to compete with, as you put it, the tough
competition we have.)
That restructuring already has started with plans to close 10
stores, including operations in Page and Prescott.