The fate of several Columbus area Big Bear stores is unknown after its parent company, Penn Traffic, filed bankruptcy last week. This is the second time in four years the company has filed for bankruptcy.
All of the 212 stores owned and operated by Penn Traffic are operating normally while the company designs a restructuring plan.
“It is possible that some store could be closed or sold, but we don’t know yet when this will happen, and which store it will affect,” said Marc Jampole, Penn Traffic spokesman.
Penn Traffic’s President and Chief Executive Officer, Joseph Fisher, blames the company’s troubles on the poor economy and increased competition from super centers and limited assortment stores.
Jampole said the company has a commitment for a $270 million line of credit. He also said the banks approved the company’s access to $70 million of that credit on an interim basis.
“The chapter 11 filing will give us the flexibility we need to address the financial and operation challenges that have hampered our performance,” Fisher said in a statement.
“We are gratified by the strong support of our leaders, which we view as an important vote of confidence in our company, our people and our potential,” he said.
Jampole said this decision is not affecting local stores.
Several major distributors had stopped shipping to area Big Bear stores after the company announced it was considering filing for chapter 11 protection, leaving some stores without popular snack foods.
Jampole said virtually every vendor is shipping to the stores, and all the stores are operating normally.
“All of the stores are fully stocked and staffed,” Jampole said.
Employees of the company are being paid in the usual manor, and all insurance benefits are expected to continue.
John Parsons, a finance professor at OSU, said the company’s financial history should not affect the reconstruction.
“Even though they filed for chapter 11 protection four years ago, it shouldn’t make things too difficult for them now,” Parsons said.
The company named Steven Panagos as chief restructuring officer, and outlined several initiatives the company plans to implement during the reorganization process. Plans include enhancing the companies merchandise, improving store operations, strengthening management programs and reducing operations costs.
Penn Traffic operates 212 stores – including 62 Big Bear and Big Bear Plus stores – 35 of which are in the Columbus area.
Big Bear is the No. 2 grocer in Columbus, second only to Kroger, which controls almost half of the industry.
