- The parent company for Louisiana-based Shoppers Value and most of its affiliates have filed for Chapter 11 Bankruptcy protection, according to The Advocate. JHJ Inc. plans to reorganize and continue operations following the proceeding.
- Part of the chain’s debt burden comes from the purchase and rebranding of six former Winn-Dixie locations in 2018. Five of those locations have since closed.
- Initial court filings took place Nov. 15, with more stores joining the proceeding earlier this week. JHJ operates 12 grocery stores and employs more than 600 workers throughout Louisiana.
As part of the Winn-Dixie rebranding effort, Shoppers Value owes more than $7 million to wholesale distributor United Natural Foods, Inc., which acquired Shoppers' Value supplier Supervalu in 2018, for inventory to supply the new stores. The company defaulted on its loan to Supervalu months ago, the bankruptcy documents said.
Total profit for the company was a meager $223,642 a month on $6.8 million in sales, the Advocate reported.
JHJ is also in debt to IberiaBank for a $2.5 million loan on top of a nearly half-million-dollar line of credit and a $3.3 million U.S. Small Business Administration-backed loan. There several other unsecured creditors in the action including wholesale meat business Scariano Brothers and Ocean Select Seafood, which are owed $102,573 and $34,187 respectively.
Assuming the company’s debt situation can be resolved through the Chapter 11 proceeding, the real challenge will arise in determining a new path forward for the discounter as other players gain momentum in the area. In 2018, Brookshire Grocery purchased eight Winn-Dixie locations in Louisiana from Southeastern Grocers to reopen under the Super 1 Foods banner. Brookshire hoped the transaction would help build out its Louisiana footprint.
Rouses Market is also a crowd favorite in the state, with unique offerings like a college-themed store in Thibodaux, Louisiana and a produce farm on one of its store rooftops. It announced a plan to open its first distribution center last year and to move its headquarters to Schriever, Louisiana. The company is currently adding five more stores to the 63 it already operates.
Meanwhile, Winn-Dixie unveiled three remodeled stores in Louisiana in 2018 in direct response to consumer demand for a better shopping experience. The new stores feature updated signage, more local products and prepared foods. The grocer also added a wing bar, expanded meat counters, fresh bakery items and natural and organic products.
Shoppers Value is not alone in its financial stress. Other retailers in the Deep South have been struggling to find financial success. Southeastern Grocers filed for bankruptcy in 2018 to address its heavy debt burden, entering negotiations to refinance its nearly $1 billion in debt. It emerged from bankruptcy shortly after.