Eagle Food Centers filed for Chapter 11 bankruptcy protection Monday.
“Quite simply, our size combined with labor costs that are among the highest in our industry makes it difficult to compete with the low-cost operators in our markets,” CEO Robert Kelly said in a statement. “Our cash constraints have made it increasingly difficult to service the company's high-yield debt obligations.”
The 110-year-old, 61-store chain, with units in Illinois and Iowa, said it has received commitments for $40 million of debtor-in-possession (DIP) financing.
“Quite simply, our size combined with labor costs that are among the highest in our industry makes it difficult to compete with the low-cost operators in our markets,” CEO Robert Kelly said in a statement. “Our cash constraints have made it increasingly difficult to service the company's high-yield debt obligations.”
The 110-year-old, 61-store chain, with units in Illinois and Iowa, said it has received commitments for $40 million of debtor-in-possession (DIP) financing.
- KC's View:
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We’d be willing to bet at this point that this bankruptcy ends up with Eagle being sold off to a bigger company that wants to expand its presence in Illinois and Iowa.
Reorganization, unfortunately, probably won’t fix the company’s biggest problem -- price-driven competitors that are draining away its market share.
