The DeLano's IGA Market unit at 207 Flamingo Road in Mill Valley, California (pictured above) is one of the independent grocer's five (out of seven total) stores closing by December 17, 2010 [Photo Credit: Jay Masunaga.]
Northern California Market Region Special Report
Breaking Buzz - Plus Analysis
Early yesterday we reported on the problems California food and grocery industry retailing veteran Harley DeLano is having with his DeLano's IGA Markets chain, which he co-owns with his son Dennis. The DeLano's operate seven stores in Northern California using the IGA banner - three units in San Francisco, three in nearby Marin County and one market in Davis, California, which opened in September 2009 and is the independent grocer's newest store. Davis, which is near Sacramento and home to the University of California at Davis, is a 73-mile drive from San Francisco.
You can read the story below on the blog or at the link here - November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area.
We've now learned additional information about the impending store closures thanks to information made public by Joseph Neri, the attorney for Delano Retail Partners LLC, which is the corporate entity for the DeLano's and their privately-held grocery chain, and other sources.
According to Neri, Delano Retail Partners LLC is closing five of its six stores in the San Francisco Bay Area. He says the stores will be closed by December 17.
The one Bay Area store that will remain open (at least for now) is in Fairfax, in Marin County. The store in Davis, California will also remain open, according to our sources.
We noted in yesterday's story - November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area - that the Fairfax and Davis stores, which the DeLano's operate in a somewhat seperate way as Hometown IGA Markets, including using a different website for the two stores than the one used for their six DeLano's IGA Markets, would likely remain open even if the other six stores are closed. That will be the case for now at least, based on our reporting.
Here are the details, according to attorney Neri, along with further information we've obtained from other sources:
DeLano Retail Partners LLC subleases the five stores to be closed in San Francisco and Marin County from Ralphs Grocery Co. of Ohio, which is an entity set up by Kroger Co., which owns Southern California-based Ralphs Supermarkets.
Ralphs Grocery Co. has evicted the grocer from the five stores. Last week Ralphs filed lawsuits in San Francisco and Marin County Superior Courts against DeLano Retail Partners LLC for failure to pay rent on the five units, according to Neri. The amount Ralphs is asking the courts to order DeLano Retail Partners LLC to pay in back rent is well over $1 million, according to court records.
DeLano Retail Partners doesn't have the cash to pay the back rent, or for that matter to keep current going forward. Therefore Harley DeLano and his son Dennis decided to close the five stores.
According to Neri, DeLano Retail Partners LLC plans to turn over the five stores to Ralphs Grocery Co. of Ohio by December 17, a little over two weeks from today. As we reported yesterday, product in the stores is being sold out. The grocer is discounting remaining products in all of the five stores to be closed.
Ralphs Grocery Co. isn't the landlord for the DeLano's Hometown IGA Markets entity, which includes Fairfax IGA, in Marin County's Fairfax, and Westlake IGA Market, in Davis. No eviction notices have been filed for the two stores as of today.
Below are the addresses of the five stores being shuttered:
>Outer Richmond District, San Francisco: 6333 Geary Boulevard (at 27th Avenue)
>Castro District, San Francisco: 4201 18th Street
>Mission District, San Francisco: 1245 South Van Ness Avenue
>Marin County, Tiburon: Cove Shopping Center, 1 Blackfield Drive
>Marin County, Mill Valley/Tamalpais Valley, 207 Flamingo Road
In yesterday's story we mentioned that Marin County-based multi-store independent grocer Mollie Stone's Market's is interested in one or more of the five closing DeLano IGA Markets stores.
First, because the DeLano's are closing the five stores by December 17 due to eviction and related financial difficulties, Mollie Stone's won't be acquiring any of the markets directly from the grocer. However, according to our information, Mollie Stones is interested in at least two or three of the sites, which once vacant will be back on the market, since Ralphs' has no plans to locate stores at the locations.
Kroger Co.-owned Ralphs Grocery Co., which is based in Southern California, has sold or closed all of its Ralphs banner supermarkets and Cala Foods/Bell Markets banner stores in Northern California, accept for one remaining Cala Foods unit in San Francisco's Nob Hill neighborhood, which is slated to close either at the end of this year or sometime in 2011. Instead it operates the Foods Co discount warehouse chain in Northern California and the Bay Area region, which is the format Kroger/Ralphs is focusing on in the market. [See - July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain.]
A (potential) Fresh & Easy opportunity
One of the stores that Tesco's Fresh & Easy Neighborhood Market plans to open early next year in Northern California is not far from the Outer Richmond District Delano's IGA Market unit, at 6333 Geary Boulevard, that will soon be closed. The Fresh & Easy store, which is at 32nd Avenue & Clement Street in the Outer Richmond, should benefit from the closing of the DeLano's market because there isn't another grocery store in the immediate portion of the neighborhood.
Tesco's Fresh & Easy would be wise to take a serious look at all five of the closing DeLano's IGA Markets stores, particularly the two units in Marin County (Mill Valley and Tiburon), where Fresh & Easy Neighborhood Market doesn't currently have any planned locations.
The 18th Street store in San Francisco's Castro District, which is a space of no more than 10,000 square-feet, is also a location Tesco's Fresh & Easy should look very closely at trying to acquire. We suspect a number of grocers will be looking at the location.
The Castro District ranks high for sales of natural, organic, fresh-prepared and specialty foods, for example. Both Whole Foods Market and Trader Joe's have plans to open stores in the Castro in 2011. Whole Foods' approval looks solid. Trader Joe's is having some problems in terms of getting its store site in the neighborhood approved.
The other two closing DeLano's stores, the Geary Boulevard unit in San Francisco's Outer Richmond District mentioned previously and the Mission District store on South Van Ness, offer less potential for Fresh & Easy in our analysis, although we would take a close look at both, just not as close as the others.
The Geary Boulevard DeLano's IGA Market location in San Francisco's Outer Richmond District is likely too close in proximity to the 32nd Avenue & Clement Street Fresh & Easy store opening early next year for both stores to do well, in our analysis. One store would probably cannibalize sales of the other, which is something that's been happening with some of the Fresh & Easy stores that are located too close to each other in Southern California, Arizona and Nevada.
The Mission District Delano's store offers some potential for Tesco's Fresh & Easy. However, based on a number of factors, it's our analysis the location would be a real uphill struggle for the Fresh & Easy format.
The Series: Northern California Market Region Special Report
November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area
November 22, 2010: Tesco's Fresh & Easy Neighborhood Market Plans Five New Stores in Northern California's Sacramento Region
November 8, 2010 - Fresh & Easy Neighborhood Market's '5800 Third Street' Northern California 'Flagship' Store in San Francisco is Taking Shape
November 5, 2010: Fresh & Easy Neighborhood Market Queuing Up Three Additional Stores in Northern California For Early-to-Mid 2011 Openings
November 3, 2010: Tesco's Fresh & Easy Neighborhood Market Plans New Store in Northern Central Valley, California City of Ceres
November 1, 2010: Tesco's Fresh & Easy Neighborhood Market Planning to Build its First Store in Northern California City of Brentwood
October 30, 2010: Raley's Launches New 'Raley's TO GO' Pre-Packaged, Refrigerated Fresh-Prepared Foods Line
October 27, 2010: Save Mart CEO Bob Piccinini Poised to Make it to the 'Bigs' as Member of Golden State Warriors' Ownership Group
September 26, 2010: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California
September 22, 2010: Sunflower Makes Three: Sunflower Farmers Market's First Northern California Store Will Be in Roseville
September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California
September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011
September 21, 2010: A Look Inside Whole Foods Market's Newest Store, A Mall Location in Santa Rosa, California
September 20, 2010: About Today's Walmart Stores, Inc. Smaller Stores Media Frenzy: We Scooped it On July 6, 2010
September 19, 2010: Whole Foods Market Gives Itself A 30th Birthday Present: 299th Store Opens This Week in Santa Rosa, California
September 18, 2010: Keep On Truckin' - Whole Foods Market Celebrates 30 Years This Weekend
September 14, 2010: Eight Plus One: Napa Unit Added to Eight Fresh & Easy Neighborhood Market Stores Opening in Northern CA in Early 2011
September 5, 2010: BevMo Chain Ends Full Time Employment For Store Workers; They Say No Way and Join With UFCW Union to Demand 'A Better BevMo'
September 3, 2010: How the California Grocers Association and its Members Can Snatch Victory From the Jaws of the Defeat of California's Plastic Bag Ban
August 25, 2010: Going Rural: New Fresh & Easy Neighborhood Market Store Planned for Sutter Creek in Northern California
August 23, 2010: Hybrid 'Good Eats' Market-Cafe From Raley's CEO Michael Teel & Company Opens Today in Sacramento CA
August 22, 2010: The Insider: Challenges & Opportunities: Tesco's Fresh & Easy Neighborhood Market Will Supply its Northern CA Stores From its Riverside County DC in Southern CA
August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California
August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.'
August 17, 2010: Henry's Farmers Market 'Beats' Fresh & Easy Neighborhood Market to Northern California Despite Multi-Year Head Start; Elk Grove Store Opens Tomorrow
July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California
July 25, 2010: Safeway to Start Construction on New Pleasanton, California Flagship Store Soon; Thanksgiving 2011 Target Opening
July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain
July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle
July 18, 2010: 'The Insider' - When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle
July 14, 2010: Tony Bennett Has Nothing on Whole Foods Market When it Comes to Loving San Francisco...That City By the Bay
July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store
June 28, 2010: Smart & Final to Open its New Format SmartCo Foods Stores in California and Arizona
June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open
June 14, 2010: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA
June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm
May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California
May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June
May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in California - And Nine of The 15 Are In Northern CA
May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start
May 6, 2010: Going Smaller & Getting 'Hybrid': Walmart's Smaller Supercenter in Vacant Retail Buildings Strategy Began in 2008
April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait
[Also: click here , here and here for a selection of past stories on Fresh & Easy and Northern Calfornia.]