Food chain had recently sold its pharmacy business
The regional food and drug chain said Thursday that the filing will enable its 44 stores to continue normal operations as it seeks a buyer for all or part of the business. The company has retained investment bank Peter J. Solomon Co. to market its assets.
“While today’s decision was extremely difficult, we believe this action is necessary to preserve the value of the business as we seek a sale,” March Supermarkets chief executive officer Tom O’Boyle said in a statement. “After reviewing every alternative, we concluded that Chapter 11 clearly provides the most effective and efficient means to ensure the best recovery for the company’s stakeholders.”
Marsh said that in recent years it has struggled to compete against larger national and regional chains in its market area of Indiana and Ohio. The retailer noted that the stiff competition has spurred price-cutting and other promotional activities that have squeezed profit margins.
Earlier this year, Marsh shut 21 unprofitable stores, which was followed in late April by the sale of its in-store pharmacy business to Hook-SupeRx LLC, a subsidiary of CVS Pharmacy. The chain had 37 Marsh pharmacy locations.
Marsh said it has requested permission from the bankruptcy court to use available cash to fund operations, which the retailer’s secured lenders have agreed to allow. The company said it expects to have sufficient liquidity to fund operations during the sale process.
Marsh Supermarkets was founded in Muncie, Ind., in 1931 by Ermal Marsh. The chain had more than 100 stores at its peak. Eleven years ago, the Marsh family sold the company to Sun Capital, a Florida-based investment firm. Marsh noted that it has been a technology leader throughout its history, being the nation’s first supermarket chain to use electronic scanners to ring up purchases and to implement a system to wirelessly deliver coupons to customers’ smartphones.