Smart & Final to buy 28 stores from Haggen

The bankrupt Haggen supermarket chain is following through on its promise to unload some of its California locations as the company looks to refocus its operations on 37 stores in the Pacific Northwest.

Haggen announced Monday that it has entered into an agreement with Smart & Final Stores Inc. for it to acquire 28 store leases and related assets from affiliates of Haggen Holdings, LLC for $56 million. Smart & Final has agreed to be a "Stalking Horse Bidder" in a court-supervised sale. If the company is approved as the successful bidder in the auction for Haggen's assets, the transaction is expected to close during the company's fiscal fourth quarter 2015.

If completed, the transaction will result in Smart & Final assuming the leases and acquiring certain associated assets of 27 closed stores in central and Southern California and one closed store in Las Vegas, Nevada, which most recently have been operated as "Haggen" banner stores. The company plans to convert these stores to its Smart & Final Extra! store format, including investment in store fixtures and equipment, decor and signage and infrastructure upgrades.

Smart & Final currently operates 270 stores under the Smart & Final and Cash & Carry store banners

Moving forward, Haggen said in a statement last month that it intends to re-build its operations around a core group of successful stores made up of 37 locations in the Pacific Northwest. The core stores include 16 of Haggen’s historical stores, one stand-alone pharmacy and 21 stores acquired from Albertson’s.

“Haggen plans to continue to build its brand in partnership with its dedicated corporate support and store teams. Haggen has a long record of success in the Pacific Northwest and these identified stores will have the best prospect for ongoing excellence,” said John Clougher, CEO of Haggen Pacific Northwest. “Although this has been a difficult process and experience, we will remain concentrated in the Pacific Northwest where we began, focusing on fresh Northwest products and continuing our support and involvement in the communities we serve.”

Haggen is still trying to hammer out a deal with Gelson's for eight stores in California.