TRAVERSE CITY — Oryana Food Cooperative Inc. has agreed to purchase the Lucky’s Market in Traverse City for $860,000. Closing is scheduled within the next week.
Oryana, which has about 7,000 owner/members, plans to operate the building in the Buffalo Ridge Center as a second Oryana store. The transition will begin as soon as closing documents are signed.
“This may seem like an odd time for expansion,” Oryana General Manager Steve Nance said, “but after exploring growth for the last several years, we began to pursue this opportunity when it presented itself in January.”
Nance jumped on the Lucky’s location before the public was even aware it might be for sale.
“When Kroger announced that they were withdrawing from the Lucky’s organization, I tried to reach out and really didn’t get any response back,” he said.
When Lucky’s later filed for Chapter 11 protection, Nance asked to bid on the Traverse City location. The offer was declined. He then connected with a potential buyer in another community who wanted to buy that Lucky’s location.
“We went together, and the bankruptcy judge basically gave us permission to bid separately,” said Nance. “We just had to reach the aggregate amount of the stalking horse bid (an initial low bid by a single bidder for all properties in the auction).”
“It was sort of a gang of independent grocers,” he said. “And that’s how we went to auction.”
Most of the gang won with their individual bids, but one did not, Nance said.
LM Acquisition Co. LLC, led by Lucky’s Market founder Bo Sharon, was the winning bidder at $1.16 million for two ongoing leased stores in North Boulder and Fort Collins, Colorado, according to a release. Oryana plans to maintain daily hours through the owner transition.
“That was definitely part of our motivation, especially in this environment,” Nance said. “At one point, we may have shut down for a month and changed it all around ... but at this point, we just want to keep selling groceries and keep that team employed.
“They’re good grocers, they know what they’re doing. They’ll become part of the Oryana family team.”
Plans call for all employees to retain their positions, said Stephanie Mathewson, Oryana marketing & communications manager. The Traverse City Lucky’s store employs 75 people.
Colorado-based Lucky’s Markets in January filed for Chapter 11 bankruptcy protection. At the time, it operated 39 stores in 10 states. The chain’s original owners, Bo and Trish Sharon, at that time said they planned to keep seven stores open, including the one in Traverse City.
That presented an opportunity for Oryana to expand.
On Friday, Lucky’s Market, together with debtor affiliates in various Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware, announced the winning bids for 23 stores and a distribution center to 10 parties for a total of about $29 million, according to a release.
Six Lucky’s locations will continue to operate as going concerns under new ownership. The six stores, which have about 500 total employees, do business in: Cleveland, Ohio; Columbia, Missouri; Columbus, Ohio; Fort Collins, Colorado; North Boulder, Colorado; and Traverse City.
Oryana, 260 E. 10th St., had in 2016 announced it planned to open a second location in Williamsburg in a structure that at one time operated as a movie theater. But those plans were dropped, as previously reported, after Lucky’s announced it would open a store in Traverse City.
The Lucky’s Market in Buffalo Ridge Center is in a structure that previously was a movie theater.
“We must like movie theaters,” said Nance.
“Pulling back from the Williamsburg location was the right move in 2016, as we were about to face a local market with much more competition,” he said.
But now the time is ripe for Oryana to expand.
“We want to support more local farmers, which is big for us, and local value-added producers,” said Nance.
Results of the auction are subject to a final sale hearing scheduled for Monday.