BELLINGHAM - Haggen Inc., which operates 30 supermarkets in Washington and Oregon under the Haggen Food & Pharmacy and Top Food & Drug names, is being purchased by a private investment firm from Florida.
Among South Sound properties, Top Foods operates two stores in Thurston County, in Lacey and Olympia; three stores in Pierce County, in Tacoma, Puyallup and Lakeland Hills and three in South King County, in Federal Way, Auburn and Kent.
The Comvest Group is purchasing a majority ownership position in Haggen from brothers Don and Rick Haggen and their families. The Haggen family is retaining a significant minority ownership stake and will continue to be involved in the company.
Terms of the purchase were not disclosed. No changes to the stores or their names are planned, although company spokesman Dave Brumbaugh said late Thursday that “the new CEO said he’s going to be taking several months to learn the company better and to visit the stores throughout the company. This investment will make more capital improvements and remodels possible.”
This is the first grocery sector investment for Comvest, a private investment firm focused on providing equity and debt capital to lower middle-market companies, including Allegiant Air. Since 1988, Comvest has invested more than $2 billion of capital in more than 200 public and private companies worldwide. Comvest is headquartered in West Palm Beach.
Haggen’s management team will remain in place with the exception of CEO and President Jim Donald, who is stepping down but will continue to serve as an adviser. Donald has led the company since October 2009.
Clarence J. “Gabe” Gabriel has been named President and CEO of the company. Gabriel has more than 25 years of senior leadership in the consumer retail, supply-chain management and manufacturing sectors. He has served in senior positions at several companies, including Albertsons and Pepsi-Cola North America, and as CEO of Movie Gallery Inc., which operated movie rental stores such as Hollywood Video.
Haggen family members believe this acquisition is the best way to stay competitive in the grocery store industry and keep the company’s headquarters in Bellingham. If the company had been acquired by another grocery store chain, the Whatcom County identity might have disappeared, Rick Haggen said.
“It was important for us to maintain the headquarters in Bellingham,” Rick Haggen said. “I think this is a great outcome for the people who work here and the customers.”
According to the Puget Sound Business Journal, the company’s gross revenue dropped from $844 million in 2008 to $740 million in 2009. During that same period, its work force in Washington stores was reduced from 3,800 to 3,200.
Donald said gross annual revenue is currently in the $650 million to $690 million range, with the company employing about 3,100 people in Washington after the recent store closures. With the recent cost-cutting changes and this acquisition, Donald said the company is now in a much stronger position going forward.
In a meeting with employees earlier in the day, Donald described the feedback about the news as positive. He noted most of the employees wanted to be assured no changes were taking place to the stores, the Haggen name remains and that Don and Rick Haggen will be around.
Staff writer C.R. Roberts contributed to this report