Lucky's Markets, Slowly Dying. A Shame

[NW Crow]

They filed for bankruptcy protection a few hours ago. Don't know unique specifics here but they were trying to get big and profitable in a competitive market. Kroger's investment helped fund the expansion. They help and fight various brands, playing them against each other, trying to have pieces or more of winners. They decided they were over-extended and other investments looked better- or more deserving of their attention- than continuing with small Lucky's (about 2% the size of Kroger's total business) . They've done that dozens of times and will do again and again.

Supermarket pitch / design is super meaningful to some shoppers and founders but from a financial perspective it is essentially fashion fishing. The bottom lines are cash flow, profit and financial market evaluations.

Lucky's might hold onto to a few stores or fold completely. Not sure how much debt they were carrying.

[brown_dog_us]

Originally Posted by Joey2k

I don't really understand the story (or stocks/shares/ownership in general). Why does Kroger selling shares mean they have to close?

An employee at their S Boulder store told me it wasn't stock. When Kroger decided to divest it was to remove what was left of their investment. When the cash was removed they could no longer pay their bills.

[davebarnes]

Just did the 11 BK.

[davebarnes]

https://www.bizjournals.com/denver/n...remaining.html

Lucky's Market founders to purchase remaining stores

Lucky's Market is selling its remaining stores to its founders, Bo and Trish Sharon.

A group led by the Sharons will own and operate seven stores, according to a release from the company: Traverse City, Michigan; Cleveland, Ohio; Columbus, Ohio; Columbia, Missouri; Melbourne, Florida; Fort Collins, Colorado; and North Boulder, Colorado.

[davebarnes]

https://progressivegrocer.com/luckys...oger-301m-plus

Lucky’s Owes Kroger $301M-Plus

"In September 2016, Kroger provided Lucky’s with a secured loan of $23.3 million, followed by a $25.2 million loan in August 2017. Later that year, the companies “entered into agreements subsequently to, among other things, lend [Lucky’s] additional amounts over time,” according to an affidavit from Lucky’s CFO Andrew Pillari cited by the Camera. By the time Lucky’s filed for bankruptcy, it owed Kroger $301,156,450. "

[beachmouse]

Florida is a hard grocery market to crack- Publix and Walmart are so well entrenched that it's hard for other stores to get traction. But grocery chains keep trying because they see the state's strong population growth and the margins that Publix gets in the state run about three times the industry average.

Kroger was hoping that Lucky's would be different enough that it could get them traction in the state where the likes of Safeway/Albertson's had failed but it didn't work out for them and the damage was bad enough to drag the whole company down. Which is disappointing- the time I've been in a Lucky's, I've been happy with the shopping experience, and while I do like Publix quite a lot, I'm always glad to see competition keep them on their toes.

[davebarnes]

https://www.supermarketnews.com/reta...astern-grocers

"Lucky’s Market, now in Chapter 11 bankruptcy protection, plans to sell seven stores that had been earmarked for closure to Southeastern Grocers, Seabra Foods and Hitchcock’s Markets.

All of the stores are in Florida"

[Huasho]

Originally Posted by davebarnes

https://www.supermarketnews.com/reta...astern-grocers

"Lucky’s Market, now in Chapter 11 bankruptcy protection, plans to sell seven stores that had been earmarked for closure to Southeastern Grocers, Seabra Foods and Hitchcock’s Markets.

All of the stores are in Florida"

I knew that as soon as the anouncement of their closures was announced in January, no way they'd keep West Melbourne opened, that was another of their teasers !!!