Ailing US retailer A&P has filed for bankruptcy in a bid to fully restructure a business loaded with debt and hit by competition.
A&P said yesterday (12 December) that it had filed for Chapter 11 bankruptcy in New York in a bid to turn around the business. Reports had emerged in the US on Friday that A&P was set to look for Chapter 11 protection.
The retailer, which runs chains including A&P, Food Emporium and Pathmark, said its stores would remain “fully stocked and open” and that there would be “no interruption in service”.
As of 11 September, A&P had debts of US$1.1bn although the level of debt it is currently carrying is unclear. The retailer said it would have access to $800m of financing to pay suppliers and employees.
President and CEO Sam Martin said: “We have taken this difficult but necessary step to enable A&P to fully implement our comprehensive financial and operational restructuring. While we have made substantial progress on the operational and merchandising aspects of our turnaround plan, we concluded that we could not complete our turnaround without availing ourselves of Chapter 11. It will allow us to restructure our debt, reduce our structural costs, and address our legacy issues.”
Martin became A&P chief in July when he replaced former Borders CEO Ron Marshall, who only took the helm in January.
Under Martin, A&P has agreed to sell stores and made a series of changes to its executive team in a bid to revitalise the business.
Jake Brace, who was appointed as A&P’s chief administrative officer in August, will lead the restructuring of the retailer. He has also been given a dual role of chief restructuring officer.