By David J. Harvey
Area Walbaums and Pathmark Stores stay open despite debt
Residents are not likely to find shuttered doors at their local Waldbaum’s supermarkets either in Howard Beach or at others in Queens, despite the company’s growing debt.
The Great Atlantic & Pacific Tea Company (A&P), which owns Waldbaum’s, announced on December 12 that it had filed for bankruptcy. In a press release, A&P President and Chief Executive Officer Sam Martin said the voluntary filing under Chapter 11 of the U.S. Bankruptcy Code was a necessary part of the company’s restructuring.
“Our customers can shop our stores with confidence, and our employees can continue delivering great value and service to our customers every day," Martin said.
He also said all stores would remain fully stocked and operating during the company’s restructuring efforts.
A&P opened its first shop in 1859 on Manhattan and owned 16,000 stores at its peak in the 1930s. The company now operates 395 stores under several names across the Northeast. Nearly 60 of those stores are Waldbaum’s, concentrated on Long Island with additional markets in Queens, Brooklyn and Staten Island.
The Waldbaum’s stores in Howard Beach—one on Cross Bay Boulevard and another on 153rd Avenue in Lindenwood—are among sparse options for buying groceries in the area. The stores’ closure could impact quality of life for neighbors.
“I don’t know what we would do if this store closed,” said Mary Bartolomo, who has lived in one of the area’s co-op buildings for 30 years. “Many of us are seniors who don’t have cars and we are able to walk to the store. I hope they get what they need to stay open otherwise we’ll be in bad shape.”
A spokesperson for Howard Plaza, the management company that holds the lease for the Waldbaum’s store in the Lindenwood Shopping Center, said that Waldbaum’s has “no intentions of closing for business or vacating the location despite the bankruptcy announcement.”
A&P will maintain its assets under Chapter 11, unlike Chapter 7 bankruptcy wherein assets are liquidated.
According to A&P’s bankruptcy claim, the company has debts totaling over $3.2 billion and assets of roughly $2.5 billion. Waldbaum’s share of the debt is nearly $900 million.
JP Morgan and Chase has issued A&P an $800 million loan related to the bankruptcy filing that will allow A&P to continue paying employees’ wages and other operating costs.
“We could not complete our turnaround without availing ourselves of Chapter 11,” Martin said. “It will allow us to restructure our debt, reduce our structural costs, and address our legacy issues.”
Despite assurances that stores will not be closed, the company has sold off properties during earlier restructuring measures. In September this year, A&P sold seven stores in Connecticut to Big Y Foods, Inc.
"The seven stores were clearly outside of our core markets and this transaction
helps advance our comprehensive turn-around strategy,” Martin said in a statement issued after the sale.
A&P also sold six Pathmark retail stores in September to Winstanley Enterprises, LLC. The six stores sold to Winstanley were in New York, New Jersey, Pennsylvania and Delaware.
Currently, A&P has 73 “dark stores” — closed locations the company has had trouble subletting or selling, according to the Wall Street Journal. The rent for these stores is projected to cost $77 million in 2011.
According to A&P spokesman Eric C. Andrus, the company will continue to analyze its store portfolio while in Chapter 11, as it has since announcing restructuring in October.
Andrus would not provide information beyond what is in the bankruptcy filings.
“Under Chapter 11, we must review every aspect of our business and we cannot speculate on what other actions may be taken to complete our financial and operational restructuring,” Andrus said in an e-mail.