Brown &Cole Stores plans to keep open two supermarkets in Everett and Arlington – Cost Cutter and Food Pavilion – despite the company’s filing for bankruptcy protection this week.
The Bellingham-based grocery chain filed for Chapter 11 in Seattle’s federal bankruptcy court, claiming debts of more than $73 million, versus sales last year of $300 million. It operates stores under several names.
The chain plans to close four stores – two in Eastern Washington and one each in Skagit and Whatcom counties. That will give Brown &Cole 23 locations.
“This is a humbling action,” Craig Cole, the president of Brown &Cole Stores, said in a written statement. But he said it will help the company in the long run. “We plan on having a viable enterprise as the end of the Chapter 11 process.”
Cole cited several factors contributing to his chain’s financial struggles, including higher costs to cover employees’ health care and a recent lack of dividends from its ownership stake in the Associated Grocers cooperative.
Brown &Cole also has been hurt by the competitive landscape, which has claimed grocery stores both regionally and nationally. Seattle-based Larry’s Markets recently filed for bankruptcy and sold its stores, a Spokane grocery chain closed, and both Albertsons and QFC have shed stores.
The opening of additional Wal-Mart supercenters, which sell groceries, in Washington, has hurt as well, said Cole, who’s been an outspoken Wal-Mart critic. There also have been unexpected costs related to Brown &Cole’s closure of stores last year, including Food Pavilion in Smokey Point. Because the company hasn’t found a new tenant for the large building it occupied, it has continued to pay substantial rent there.
Cole added that despite closing four more stores, the bankruptcy filing won’t end his company.
In Everett, the Cost Cutter store along Evergreen Way actually is one of the chain’s best-performing stores, said spokeswoman Sue Cole. In Arlington, the chain operates Food Pavilion on Haller Street.
Founded in 1909, Brown &Cole employs about 1,500 people statewide.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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