Although Southeastern Grocers' financial woes are well known, a harbinger of the reported plan to shutter stores came earlier this month, when Virginia Beach, Va.-based Wheeler Real Estate Investment Trust Inc., in an update on its management transition and strategic initiatives, noted that, among its tenants, "Southeastern Grocers (SEG) has been contemplating business decisions that would affect our company. We have been in proactive and substantive discussions with SEG with the goal of ensuring our portfolio’s stability. While we are not at liberty to discuss all of the details surrounding these discussions, we are encouraged by our progress and plan to be able to share more details with you in the near future."
Meanwhile, buyouts by Morgan Stanley and its own managers left Williamsville, N.Y.-based Tops struggling to pay off its debt. The chain's sales also suffered when the U.S. government slashed food-stamp subsidies. Tops could file for court protection from creditors as soon as this month, Bloomberg reported, citing people familiar with the matter.
In response to the reports, the president of Oriskany, N.Y.-based UFCW Local One, which represents more than 12,000 Tops associates, said that the union has been keeping track of the company's finances and talking with its own financial advisers over the past few months, according to the Rochester, N.Y., Democrat & Chronicle.
"Since mid-January, UFCW Local One has been consulted by our legal team consisting of health care, pension and 401(k) attorneys, and an attorney that specializes in restructuring and bankruptcy filings," noted Frank DeRiso. "We have additional meetings set up this coming week to discuss more strategies to hit this situation head-on."
Southeastern Grocers operates the Bi-Lo Winn-Dixie, Harveys and Fresco y Mas banners. Tops has about 170 stores in the Northeast.