Dahl's Files $41 Million Bankruptcy

November 11, 2014

Dahl's Foods Inc., an 83-year-old Des Moines-based grocery store chain, will disappear from the local landscape as a locally owned company, The Des Moines Register reported today. The 10-store chain filed a $41 million bankruptcy petition in federal court on Sunday asking that it be allowed to reorganize and sell its stores. The likely buyer will be its supplier or another grocery company. The company is also asking that the process be moved along quickly. Dahl's said yesterday that Kansas City, Kan.-based Associated Wholesale Grocers (AWG) plans to buy Dahl's assets and rebrand the stores. AWG is a retailer-owned grocery cooperative and grocery distributor. Court filings show that AWG has offered to buy the chain's assets for a base price of $4.8 million, which could be adjusted depending on the value of inventory and other items. Under one scenario, one of AWG's co-op members could own the stores, with AWG funding the acquisition. AWG said that it plans to rebrand the remaining Dahl's stores and remodel and update the properties. The new brand was not identified.

Sears Mulls Forming REIT to Boost Liquidity

November 7, 2014

Sears Holdings Corp. said that it is considering forming a real-estate investment trust that would hold 200 to 300 of its stores, as the struggling retailer continues to pursue ways to shore up its balance sheet, the Wall Street Journal reported today. Through a sale-leaseback deal, the company would continue to operate in the store locations, but the real estate would be sold to a newly formed REIT and shareholders would be given rights to purchase shares or equity stakes. The retailer said it would book “substantial proceeds” from such a move. Sears has been hemorrhaging cash as it reported losses that have rattled its supplier base. The company has recently sought to raise cash as the holiday season approaches, including selling $625 million in debt to owners of the company’s stock and taking a $400 million short-term loan backed by 25 of the company’s properties.