Haggen Positions Itself for Long-term Growth

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Haggen Positions Itself for Long-term Growth

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Bellingham-based grocery chain continues to close underperforming locations and enhance thriving stores

July 31, 2013 • BELLINGHAM, Wash.

Haggen, Inc. today announced it would continue to improve its business and strengthen its competitive position by closing a number of underperforming locations. At the same time, the company is transforming many of its TOP Food & Drug stores into Haggen Northwest Fresh stores, and is examining opportunities for future growth.

For 80 years, Haggen has opened stores under several banners with different value propositions. In 1982, Haggen opened TOP (Tough on Prices) Food & Drug stores to offer customers quality products at price points of recognizable value. Haggen also branched out beyond its hometown of Bellingham in Whatcom County to open Haggen and TOP stores in other regions. Some of these concepts and locations have been more successful than others, depending on the retail environments, competitive landscape and surrounding neighborhoods.

Throughout this transformative process, the company is engaging in an ongoing, thoughtful and thorough examination of all of its stores. It will continue to explore options for stores that are not meeting its financial expectations, while enhancing those that are performing well.

“Haggen is built on a solid foundation, led by a robust, experienced management team and backed by strong investors,” said Clement Stevens, co-president and senior vice president of merchandising. “We are taking necessary actions to sustain and grow our business.”

He added, “Closing stores is an extremely difficult decision, knowing that it will impact some of our valued employees and their families, as well as our guests. The closures are in no way a reflection of our dedicated, hard-working employees. We are committed to placing many of those impacted by the closures in positions at our other stores.”

“These are necessary changes that should position Haggen for business success,” said Rick Haggen, former co-chairman of the company’s board and co-owner. “While difficult in the short-term, I’m confident in the transformation process being implemented by the management team.”

Upcoming Closures
In the coming weeks, the company will close its Haggen Northwest Fresh stores in Bellevue and Shoreline.

Stevens said, “Instead of closing these stores when they were struggling as TOP branded stores, we decided to do all we could do to try and turn these stores around. We invested in both remodeling and rebranding, dedicating our collective resources to give these locations one last chance. Unfortunately, despite our best efforts, we were unable to turn these stores around. These closures enable us to free up capital and enable us to focus our efforts on our thriving stores.”

Northwest Fresh Store Concept
The success of the Northwest Fresh brand is evidenced in many of the nine other remodeled stores. The TOP Food store in Olympia is the next location to be converted to the new format, with its grand re-opening celebration scheduled for August 14.

With its Northwest Fresh concept, Haggen showcases its commitment to bringing the sustainable local food economy to life. Store signage highlights long-standing partnerships with local farmers, ranchers and food purveyors, and displays elevate the best of local, seasonal and organic foods. Haggen Northwest Fresh stores feature expert butchers, bakers, florists and pharmacists, offering guests a full-service shopping experience.

“We strongly believe in the Northwest Fresh concept,” said Stevens. “We’re looking forward to having all of our stores united under a single banner. Haggen is passionate about providing guests the freshest, best food in the region every day.”

Commitment to its Employees and Mission to Support Local Farmers
As the company implements its transformation plan, Haggen remains steadfast in its commitment to provide excellent wages and benefits to its employees, and to support local farmers and food producers. This commitment is evident in the quality of service and products at Haggen stores.

Haggen is proud that it offers its employees a living wage with strong health benefits. As a result, the company boasts an unusually low turnover rate, and the average tenure of a Haggen employee is nine years.

“As we consider these tough decisions, we continue to take good care of our employees, who in turn take good care of our guests,” said Stevens. “Similarly, we see our vendors and suppliers as valued business partners. When we succeed they succeed, and the decisions we’re making in this process will not only benefit the long-term health of Haggen, but will strengthen our partners’ businesses.”

Stevens added, “As Haggen approaches its 80th anniversary, we are thoughtfully evaluating how to ensure our business will thrive for another 80 years. This is part of the evolution of any healthy business. We are confident in our team and our long-term strategy to drive Haggen’s growth and success in the years to come.”

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