NEW YORK (Reuters) - The U.S. supermarket chain Tops Markets LLC filed for bankruptcy on Wednesday, saying an unsustainable debt load, falling food prices and stiff competition from Amazon.com Inc (AMZN.O) and other low-cost rivals forced it to reorganize.
Tops said it expects the 169 stores it operates in upstate New York, Pennsylvania and Vermont to remain open while it restructures under Chapter 11 of the U.S. bankruptcy code in White Plains, New York.
The Williamsville, New York-based company said it had $977 million of assets and $1.18 billion of liabilities as of Dec. 30, 2017, and employs more than 14,200 people.
Some supermarket chains are struggling with falling sales and profit margins as big-box retailers, membership clubs and warehouses, and online retailers such as Amazon expand their food operations and undercut them on price.
Management acquired Tops in 2013 from Morgan Stanley’s (MS.N) private equity arm, which had bought the company six years earlier from the Dutch retailer now known as Koninklijke Ahold Delhaize NV (AD.AS).
In a court filing, Tops said “transactions undertaken by prior ownership” left it with unsustainable leverage.
It also said a heavily unionized workforce, changing customer tastes, rivals’ pricing power and “intense competition from online retail giants such as Amazon” made it increasingly difficult to compete.
Amazon last year bought Whole Foods Market, which overlaps with Tops in parts of New York.
Tops said it has lined up $265 million of financing to help operate during the reorganization process, and is in “constructive” talks with some bondholders.
The company retained Evercore Inc (EVR.N) as its investment banker, and also hired FTI Consulting Inc as its restructuring advisor Weil, Gotshal & Manges as its law firm.
Tops opened its first modern supermarket in 1962, in Niagara Falls, New York.
Reporting by Jonathan Stempel and Jessica DiNapoli in New YorkEditing by Marguerita Choy