WILLIAMSVILLE, N.Y. — Tops Markets LLC officials announced Wednesday that the company, with hundreds of millions in debt, will seek Chapter 11 bankruptcy protection this year.
Frank Curci, CEO and chairman of Tops, said in a release the supermarket chain is planning for all daily operations at Tops stores to continue as normal through the filing process.
“We are now undertaking a financial restructuring, through which we expect to substantially reduce our debt and achieve long-term financial flexibility,” he said. “This will enable us to invest further in our stores, create an even more exceptional shopping experience for our customers and compete more effectively in today’s highly competitive and evolving market.”
Curci told The Buffalo News the filing process should take about six months, during which time they will begin to review performances at each of its 169 stores in upstate New York, northern Pennsylvania, Massachusetts and western Vermont — five of which are operated under franchise agreements. He reportedly said they may close their weakest performing stores, though he does not expect many to be closed.
The chain, which opened its first supermarket in Niagara Falls in 1962, employs over 15,000 people. Three stores are in Cattaraugus County, one is in Allegany County and two are in Pennsylvania’s McKean County.
Curci’s statements come after Bloomberg news reported Saturday that Tops officials were considering bankruptcy to seek court protection from its creditors. A 2017 report from Reuters said the supermarket chain had a $723 million debt load.
Frank DeRiso, president of UFCW Local One which represents 12,000 Tops employees, said earlier this week he believed Tops will honor its worker contracts, including pension agreements.
“Over the past several months we have been meeting with financial advisors hired by our International Union to continually monitor the finances of Tops Markets,” DeRiso said. “As reported earlier the company has hired Evercore (a global independent private investment firm) to help them restructure their enormous debt.”
He said the union had additional meetings set for this week to discuss the bankruptcy, and the union was “monitoring this situation daily and will keep members informed of new developments.”
Tops has also received a commitment for a $125 million debtor-in-possession term loan financing facility from certain noteholders and a $140 million DIP asset based revolving loan from Bank of America, according to the Wednesday release. Tops officials said the funds will support the business during the court supervised restructuring process.
Much of the grocery chain’s debt was accumulated after two leveraged buyouts — one by Morgan Stanley in 2007 and a second by the Tops management team in 2013.
Rapid expansion may also be a factor. The company expanded from 70 stores in 2007 to the current 170 locations. In 2010, the firm purchased the Penn Traffic Co., which owned 79 stores under several brands including P&C and Quality Markets. Many of the former stores were reopened as Tops. Several former Big M stores were purchased and rebranded as Tops, as well.
Tops Markets LLC is not publicly traded, and as such is not required to file financial information on revenue, profits or debt publicly. More information on the company’s bankruptcy filings can be found online at dm.epiq11.com/#/case/TOPS/info.
