Chippewa Falls-Based Grocer Begins Selling Stores To Repay Massive Debt

A judge has approved the sale of 11 western Wisconsin grocery stores owned by a faltering chain based in Chippewa Falls. Most of those stores will remain open avoiding layoffs in communities from Hayward to Black River Falls.

Gordy’s Market owned 26 stores across western and northwestern Wisconsin. In August the chain was sued for nearly $87 million by it’s main supplier Spartan Nash Co. and since then claims against the company have ballooned to at least $116 million.

In an attempt to repay creditors, a circuit court judge has approved the sale of 11 stores in Black River Falls, Osseo, Augusta, Niellsville, Whitehall, Shell Lake, Spencer, Arcadia, Eau Claire and Rice Lake, most of which will stay open. Attorney James Sweet represents members of the Schafer family that owns Gordy’s Market. During the court proceeding Thursday, Sweet said the sales are the best outcome for an awful situation.

“All the communities are going to have these stores left open with all the people employed. I’d say this is a great outcome and they don’t need to wait any longer to have these sales approved,” Sweet said.

Six more Gordy’s locations in Chippewa Falls, Cornell, Ladysmith, Barron and Chetek were scheduled to be part of an auction Monday in Milwaukee, but were excluded because of negotiations between supplier Spartan Nash and members of the Schafer family. Sweet said the plan is to have a new company, in which the Schafers are part owners, operate the stores.

“This is an opportunity to keep the family in the grocery business under a smaller, more modified arrangement than they currently have,” Sweet said.

Festival Foods is buying three Gordy’s locations in Eau Claire and Tomah. Sales of the remaining stores are still being negotiated. In late August a court-appointed receiver for Gordy’s said up to 1,000 employees could have been laid off if none of the stores were sold.