Alabama's Belle Foods filed for Chapter 11 bankruptcy protection Tuesday citing difficulties to pay their creditors with the combined revenue of its 57 stores.
The Birmingham, Al. based company purchased the stores from Southern Family Markets in June 2012 after the latter took control of several of the Bruno's and Food World shops.
According to the documents filed in the U.S. Bankruptcy Court for the Northern District of Alabama, Belle Foods owes $28 million to Southern Family Markets and $5.1 million in accounts payable as well as $900,000 on a pension withdrawal liability note in addition to another $8 million due in other accounts payable.
According to Belle Foods, "bankruptcy filing has been precipitated by a variety of factors that have led to a deterioration in [its] business and a lack of liquidity.” The company added that "higher payroll taxes in 2013 have led to a decline in purchases by the (Belle’s) customer base. Furthermore, [the company] has also seen an increased amount of competition in several of its markets from other grocers. With older locations, Debtor has had difficulty competing with the newer grocery stores that have moved into its markets.”
In April Belle Foods announced the company wanted to reduce the number of full-time employees and replace them with 300 part-time employees in a move to save money. According to the court filing, the company has 2,850 employees, 34 percent of whom are full-time and 2,141 union employees.
In recent months the company has been in the process of rebranding their stories, which as of now operate as Bruno’s, Food World, Piggly Wiggly and Southern Family markets.
Among the creditors the company is not able to pay figure Barber's Dairy ($559,394), Coca Cola Bottling Co. United ($485,444), Frito Lay ($474,572), Flowers Baking Co. ($402,911), Buffalo Rock Co. ($355,135), and Pepsi Cola Bottling ($377,420).