The Birmingham-based company that owns the Food World grocery store in Cullman has filed for bankruptcy, and plans to close 13 of its 57 locations within the next few weeks.
Belle Foods entered Chapter 11 bankruptcy protection Monday, saying it is struggling to pay debt due to a lack of liquidity, lending issues and increased competition in several markets. The company also suspects higher payroll taxes in 2013 have led to a decline in purchases by the company’s customer base.
The Cullman store is not included on the initial list of closures, which will shutter locations in Decatur, Homewood, Florence, Gadsden, Mobile and several other communities across Alabama, Georgia and Florida. The company has identified all of the affected locations as “underperforming.”
All affected stores will be closed and sold immediately as part of the bankruptcy agreement.
The company reportedly still owes Southern Family Markets $28 million, as part of the deal to buy the majority of locations. The company also owes C&S Wholesale Grocers $6 million, and has approximately $8 million due in other accounts payable according to documents filed in the U.S. Bankruptcy Court for the Northern District of Alabama.
Belle Foods also made headlines in April when a plan to hire 300 part-time workers at its stores in Alabama, Georgia, Florida and Mississippi was announced. The positions were created by transitioning or laying off the vast majority of full-time employees.
The company had previously planned to renovate and rebrand the Cullman location under the Belle Foods brand later this year. It is unknown how this filing might affect those plans.
Multiple calls and e-mails to Belle Foods officials were not returned by deadline of this article.
Trent Moore can be reached by e-mail at email@example.com, or by telephone at 734-2131, ext. 220.