Lucky's Market on Monday joined the list of retailers declaring bankruptcy, with the natural foods chain saying it plans to keep seven stores running in five states, while shutting down dozens of stores in around the U.S.
The chain said stores will remain open in Traverse City, Michigan; Cleveland and Columbus, Ohio; Columbia, Missouri; Melbourne, Florida; and North Boulder and Fort Collins, Colorado. The company's remaining 32 stores in 10 states will all close.
The decision to file Chapter 11 will facilitate the sale of its remaining assets, with Lucky's signing an agreement with ALDI for five leased store properties and the purchase of one company-owned property, Lucky's said in a statement.
"The company still plans to cease operations in the 32 identified locations in the coming weeks and is currently running sales for its customers in those stores."
Kroger exit a tough blow
The bankruptcy comes on the heels of Kroger's decision to sell its stake in the natural foods chain founded in 2003 by married chefs. The Colorado company had 17 stores when Kroger invested in Lucky's in 2016. The specialty grocer has since expanded to 39 stores, most of them in Florida.
But in December Kroger said it would divest the chain and take a $238 million charge.
"The amount of investment that it would take for Lucky's to be a meaningful contributor to Kroger overall, and the efforts that it would take, we just didn't think it created a good return for the investments that were needed to be made," CEO Rodney McMullen said in an earnings call early last month.
The South Florida Sun-Sentinel on Tuesday reported that 20 Lucky's stores would close by Feb. 12, leaving just one store open in the state. Separately, the Missoulian reported that the Lucky's in Missoula, Montana, would soon shut down. And the trade publication Progressive Grocer reported that Lucky's would close 32 stores in 10 states.
A planned location set to open in Denver next year has now been shelved, according to another media report, while a local outlet reported a 25% off sale was slated for next week at a soon-to-close Lucky's store in Jackson, Wyoming. In Kentuckky, Louisville Business First reported the only Lucky's would also close.
As of last year Lucky's had about 2,500 employees and revenue of $569.5 million in revenue, according S&P Capital IQ.