Bashas', one of the world's largest privately-owned family companies, has filed for Chapter 11 bankruptcy protection.
The Arizona-based company attributed its bankruptcy to a particularly challenging situation in Arizona where growth has stagnated and the state is overloaded with grocery stores. In addition, the national credit crisis, increased competition from cut-price competitors and an ongoing dispute with the grocery workers' union have hindered the business.
The 77-year-old company released a statement claiming the move was intended to protect the business from closure and help it navigate the challenging economic climate. Senior vice president and Basha family spokesperson Edward Basha III said: "We our confident that our family business is here to stay. We're not winding down operations and it is not our intention to sell to another entity."
The third generation family member went on to add: "The short-term plan is to emerge from Chapter 11 in the first quarter of 2010 and clearly we are developing long-term strategies to ensure future success."
This announcement comes after a series of attempts by the business to cut costs including laying off 350 staff in March and closing stores that were underperforming, with more store closures planned for the summer.
Bashas' was founded in 1932 by brothers Ike and Eddie Basha and the family now owns and operates more than 150 stores in Arizona, California and New Mexico. Currently in its third generation of ownership, the company's most up to date figures from 2006 show revenues of $2.5 billion.
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