Food Pavilion files for Chapter 11

'Business as usual' for Moses Lake store

MOSES LAKE - A resident grocery store remains open despite its parent company filing for Chapter 11 protection.

Bellingham-based supermarket chain Brown & Cole Stores, LLC, filed a Chapter 11 petition in a Seattle federal bankruptcy court Tuesday.

Jointly owned by Associated Grocers, Inc., and Brown & Cole, Inc., the company operates under various trade names, including Food Pavilion, which has a location in Moses Lake. Others include Food Depot, $ave-on-Food$ and Cost Cutter.

The Chapter 11 petition provides the company the ability to reorganize its finances and operations.

"What that means is that everything prior to Nov. 7 is treated as one company, everything going forward is basically a new business that is being reorganized," explained Sue Cole, Brown & Cole public affairs director.

The company expects to emerge from Chapter 11 within seven months, as a financially viable company with a smaller focus.

Three major factors contributed to the situation: discontinuance of dividends on ownership investment in the company's wholesaler, Associated Grocers, a retailer-owned grocery cooperative; spiraling health care costs and Wal-Mart's competition.

Cole said positive sales growth and customer trends over the past year, provide a counterbalance to those factors.

"The problem isn't customers. The problem isn't people buying things at our stores. The problem is overwhelming expenses that we just couldn't get out of that came right off our bottom line before we could even do anything else," Cole said.

Customers should notice very little, she said, noting the stores will be ramping up product selection and choices, and several "very aggressive" marketing campaigns into the beginning of 2007.

The Moses Lake operation remains open and employees should not be impacted.

"It will be business as usual," Cole said. "Nothing should change."

Brown & Cole expects to be in business with a competitive company, albeit a smaller one, Cole said.

"We are going to do everything we can to save the family-wage jobs and benefits that our employees have," she said. "We probably could have maybe staved this off for a bit if we had decided to cut back on employee wages and cut back on benefits, but to us that was not acceptable."