SAN FRANCISCO — Andronico's Community Markets here said last week it hopes to emerge from Chapter 11 bankruptcy within 60 days with a new owner in place and the ability to keep its stores fully stocked.
The seven-store chain filed for Chapter 11 protection and is seeking debtor-in-possession financing that would allow it to sell the company to a private investment group that would keep the stores in operation.
The filing is a prepackaged bankruptcy intended to effect the sale of the company, a spokesman for Andronico's told SN, and while there is no guarantee that a sale will be completed — pending a full audit of Andronico's assets — an agreement is anticipated, the spokesman said.
The investor group Andronico's is talking with is Renovo Capital, which has offices in Dallas, Denver and Irvine, Calif. Through Renwood Opportunities Fund, Renovo invests in smaller, mid-market companies and provides equity capital for businesses facing liquidity shortfalls and profitability challenges, according to its website.
“There's a desire on the part of both Andronico's and Renovo to move quickly,” said Andronico's spokesman Adam Alberti.
If the deal with Renovo goes through, Andronico's management team and all store personnel will remain in place, he said. “But the company will be better capitalized, with money to keep the store shelves better stocked, to maintain store conditions at the level where they should be and to expand the store base if possible.”
Of the seven Andronico's stores, four are in Berkeley and one each is in Los Altos, San Anselmo and here. The company moved its headquarters last year from Albany, Calif., to offices in San Francisco.
Bill Andronico, the retailer's chief executive officer and the grandson of its founder, said his company has struggled following an aggressive expansion program that began in the late 1990s left it with “significant debt.” The three new stores it opened during that period have since closed, but the company was unable to get its bank lenders to restructure their claims, leaving it with too heavy a debt, he explained.
Alberti said the debt load is between $10 million and $50 million, according to the Chapter 11 filing.
“This is a bittersweet moment in our history,” Andronico said after the filing. “We have struggled mightily to keep going, but the combination of the economic downturn and a broken balance sheet was too heavy a burden.
“The good news is that this deal preserves our markets and keeps our employees working.”
In 2010, the chain replaced nearly all of its executive management team with a group of veterans from Whole Foods Market , Austin, Texas, and Safeway, Pleasanton, Calif., Andronico said, “but the lack of resources did not allow for a full recovery.”