The parent company and most of its affiliates operating the Baton Rouge-based Shoppers Value grocery store chain across south Louisiana have filed for Chapter 11 bankruptcy protection and reorganization, according to the The Advocate, the Baton Rouge, La., newspaper.
Court filings cited debt tied to the purchase and rebranding of six former Winn-Dixie locations in 2018, five of which have since closed.
Shoppers Value’s business model is touted as a 10% retail mark-up at the register on top of the wholesale price it pays for products, according to its website.
The local discount grocery chain owes more than $7 million to its wholesale distributor and supplier, Eden Prairie, Minnesota-based SuperValu, which was acquired in October 2018 by competitor Providence, R.I.-based United Natural Foods Inc. in a $2.9 billion deal.
“The vast majority of the indebtedness was incurred for the purpose of purchasing inventory for multiple grocery stores formerly operating under the name Winn-Dixie,” the bankruptcy filing said, adding that the company defaulted on its loan from SuperValu several months ago and attempted to negotiate the loan outside of court.