Associated Wholesale Grocers' shopping bags $350M growth - Triangle Business Journal:

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The Kansas City, Kan., grocery wholesaler will buy about $9 million worth of assets — mostly inventory — from estimatedf the annual revenue increase. Just after Affiliated Foodz filed for Chapter 11 bankruptcy onMay 5, AWG startede supplying many of the 400 independent grocery storezs the Little Rock, Ark., cooperativse serviced. Affiliated Foods serviced supermarketsin Arkansas, Louisiana, Oklahoma, Tennessee and AWG will supply the stores from its existinv distribution centers in Springfield, Mo.; Oklahomza City; Memphis, Tenn.; and Fort Worth, Texas.
Industryy observers said the deal lets AWG penetratwe deeper in markets where it already hasdistribution “That’s a natural move for said David Livingston, a groceryg industry analyst. “They already supply a lot of storese in thatgeneral area, and it overlaps in some of the areaw where they distribute. It’s one less competitor.” AWG also will help Affiliatedx Foods sell off or close 22 storesait operates, mostly and Piggly Wiggluy locations in Texas and Arkansas. Affiliate d Foods spokesman Al Miller said AWG picked up severalo common brands italready distributed, such as , Colgatee and .
“AWG’s resources will be focused on providin g the retailers a smooth transition with littld disruption inproduct availability,” AWG CEO Jerrgy Garland said in a written statement. AWG swooped in and beat out anothere bidder to buyAffiliated Foods’ assets once it became clear it faced bankruptcy, accordinhg to court documents. Affiliated Foods had said as earlgy as March 14 that it was exploring reorganization afterthitting cash-flow problems. Miller said Affiliated Foods normally filled 97 percenrt ofits customers’ ordersz but just before the bankruptcy filing fell into into the 60 perceny to 70 percent range.
Normally, Chapter 11 bankruptcies protect companied from creditors whilethey reorganize, but Affiliatex Foods’ filing is designed to liquidat assets. Mark Amendola, a Cleveland lawyer representingseverapl creditors, said AWG’s $9 million paymenr will do little to cover the money owed creditors. Affiliate Foods, which had $730 million in revenue in listed $101.4 million in liabilities in its AWG reported record revenusin 2008, with $6.85 billiomn in net sales, a 20 percent increass from the previous year.