FORMERLY PE OWNED
Haggen
Includes Haggen Food & Pharmacy
Grocery · Bellingham, WA
- PE Firm
- Comvest Partners
- Year Acquired
- 2011
PE turned an 18-store grocer into a 164-store chain that collapsed in eight months.
What Happened
- Comvest Partners acquired a majority stake in Haggen in 2011, backing its expansion from 18 stores to 164
- When Albertsons and Safeway merged, Haggen used PE backing to buy 146 divested stores in a single deal
- Comvest immediately sold the real estate and leased it back to Haggen, extracting roughly $300 million while saddling the operating company with massive rent obligations
- Haggen sued Albertsons for $1 billion, accusing it of sabotaging the handoff of the stores — settled for just $5.75 million, less than 1% of the claim
The Damage Done
- Haggen filed Chapter 11 within eight months of expanding — called the fastest failure in modern supermarket history
- The expansion took Haggen from 2,000 employees to more than 10,000 — and most of those new jobs were gone within a year as stores closed in rapid succession
- Communities that lost their Safeway or Albertsons found the replacement gone too, creating food deserts in some neighborhoods
- Shoppers at converted stores immediately noticed prices $1,000/year higher than the Albertsons or Safeway they replaced — sticker shock drove customers away within weeks
Sources
- Albertsons settles Haggen's $1 billion lawsuit for $5.75 million — Seattle Times(2016-01-28)
- Private Equity Pillage: Grocery Stores and Workers at Risk(2015-12)
- Haggen: What Went Wrong(2015-11)
- Haggen bankruptcy: fastest failure in modern grocery store history — OC Register(2015-09-10)
- Haggen reviews a mixed bag: shoppers not happy with prices — OC Register(2015-04-23)
- Haggen to Expand from 18 Stores to 164 Stores with Major Acquisition — Haggen (archived press release)(2014-12-16)