What Does The A&P Bankruptcy Mean For The Upcoming NoLibs Pathmark?
Here’s a little-known fact (at least for those outside grocery store circles): In 2007, the Great Atlantic and Pacific Tea Co. (A&P) acquired Pathmark for $1.4 billion, which included $475 million in debt financing. This came after decades of downsizing and increased competition from an increasingly balkanized grocery-market market (the surge of pseudo natural food stores like Trader Joe’s and Whole Foods for some, cheap all-your-shopping Target and Wal Mart for others) and on Sunday, these factors, combined for the ultimate sad orgy (2-3 years of the Great Recession) found A&P filing for Chapter 11 bankruptcy.
(Note: The answer to the question in the headline is below)
According to APP.com (a news site based out of New Jersey), court papers listed $2.4 billion in assets and $3.2 billion in liabilities for the Jersey-based company. The Inky notes that much of A&P’s woes stem from its 2007 acquisition of Pathmark, which was financed by…wait for it…Lehman Brothers and Bank of America, according to a 2007 Associated Press article.
It’s also noted by a Business Wire press release that in spite of the filing, J.P. Morgan Chase will provide the company with $800 million in financing and the company insists stores are “fully stocked and will remain open.”
That was all before. Moments — seriously, moments! — before this blog was supposed to go up, Bart Blatstein, President of Tower Investments, who owns the property returned our call and assures us all plans for the 2nd and Girard Pathmark are on target. In fact, he says, the Pathmark on Girard is the “flagship for the company, at least as the company sees itself as. Work is continuing, it’s almost done and it’ll be open in a couple months.”
The Pathmark in NoLibs will be a ‘higher-end’ store, and the company hopes this will mark the beginning of more stores just like it.
The Chapter 11 filing, according to Blatstein, will be used as a reorgnization technique so the company can unload what could be referred to as its toxic assets, aka, locations acquired in the 2007 deal that actually hurt A&P’s overall company profits. “It’s ironic,” says Blatstein, “because Pathmark and A&P will emerge as a much stronger company…They’re getting rid of their old baggage so the company can reemerge stronger and with a better direction.”
(Answer to the headline: Basically nothing.)
Image: Tower Development
UPDATE, MONTHS AND MONTHS LATER: The NoLibs Pathmark has been canceled, according to Blatstein! Check out this post at the Inquirer.