The grocery landscape in Louisiana is closely watching as JHJ Inc., the parent company behind the popular Shoppers Value Foods chain, has officially filed for Chapter 11 bankruptcy protection. This strategic move signals the company’s intent to reorganize its financial structure while maintaining its operations, ensuring that shoppers value foods and the convenience they offer remain accessible to local communities.
According to William Steffes, attorney for The Steffes Firm LLC, representing JHJ Inc., the company is committed to “reorganize and continue operations.” This reassurance, reported by the Advocate newspaper, comes as the initial court filings made in mid-November are being further substantiated with additional stores formally joining the bankruptcy proceedings. The core issue driving this financial restructuring appears to be substantial debt accumulated from the ambitious acquisition and rebranding of six Winn-Dixie locations back in 2018. Of these, five locations have unfortunately been closed, adding to the financial strain.
JHJ Inc. is a significant employer and grocery provider in Louisiana, operating 12 Shoppers Value Foods supermarkets, primarily concentrated around Baton Rouge, alongside a Food Depot in Bogalusa. Collectively, these stores employ over 600 individuals across the Baton Rouge metro area, Lafayette, Bogalusa, and Jefferson, underscoring the importance of their continued operation for local employment and access to groceries.
A significant portion of JHJ Inc.’s financial obligations is owed to Supervalu, their wholesale distributor and supplier. Bankruptcy documents reveal a debt exceeding $7 million to Supervalu, stemming from promissory notes underwritten between May 2016 and November 2018. It’s noteworthy that Supervalu was acquired by United Natural Foods Inc. (UNFI) in a major $2.9 billion deal in October 2018, making UNFI a key creditor in this bankruptcy case.
The bankruptcy filing explicitly states that “the vast majority of the indebtedness was incurred for the purpose of purchasing inventory for multiple grocery stores formerly operating under the name Winn-Dixie.” This highlights the financial burden associated with the expansion and rebranding effort. The filing further indicates that JHJ Inc. had defaulted on its loan from Supervalu several months prior to filing for Chapter 11 and had attempted to negotiate a resolution outside of court, ultimately leading to the current reorganization strategy.
UNFI, now a major player in this situation as Supervalu’s acquirer, is the largest publicly traded grocery distributor in the U.S. and holds a prominent position as No. 30 on Progressive Grocer’s 2019 Super 50 list of top grocers. Their involvement as a creditor adds another layer of complexity to the Shoppers Value Foods bankruptcy proceedings.
As JHJ Inc. moves forward with its Chapter 11 reorganization, the focus will be on stabilizing its finances, streamlining operations, and ensuring that shoppers value foods continues to serve its customer base. The outcome of this process will be crucial for the future of the grocery chain, its employees, and the communities that rely on its stores.
