A Phoenix-based grocery store chain was purchased Monday out of bankruptcy for $55 million by two Hispanic retail companies, officials said.
Southern California-based Cardenas Markets and Northgate Gonzalez Market teamed up to purchase Pro's Ranch Markets, which has 11 stores in Arizona, New Mexico and Texas.
Pro's Ranch Markets filed for Chapter 11 bankruptcy organization in May 2013, less than a year after it was voted Arizona's Retailer of the Year by the Arizona Food Marketing Alliance. Cardenas Markets and Northgate Markets formed a separate company, Cardenas Northgate Group Ranch, to acquire and operate the newly acquired chain.
"We believe we can build upon the legacy of well-established values and the strong market presence that Pro's Ranch is known for," said Oscar Gonzalez Reynoso, Northgate Gonzalez Market co-president, in a press release. "This is a win for everyone -- customers, employees, neighborhoods and families."
As part of the acquisition, Cardenas Northgate will get the use of Pro's Ranch Markets corporate office in Phoenix as well as a 151,000-square-foot warehouse. Northgate will oversee the day-to-day operations as well as overall management, officials said.
For now, Pro's Ranch Markets' new owners plans to keep all 11 grocery stores open as it evaluates various options. The chain was founded in 1982 and has more than 2,500 employees in those three states.
"Even though Pro's Ranch has experienced a number of operational and financial difficulties over the last few years, it has continued to foster a fiercely loyal customer, one that took years to develop," said Jesus Cardenas, president of Cardenas Markets.
The grocery business is highly competitive with smaller margins than other retail businesses, analysts say. Competition from Target, Costco and Walmart has put pressure on grocery store chains. But analysts believe specialty retailers, such as Trader Joe's, and those that focus on minorities are better positioned in the retail landscape.
In the acquisition of Pro's Ranch Markets, both Southern California retailers indicate it's part of their plans for future growth. Cardenas Markets has 29 stores in California and Nevada, while Northgate Gonzalez Markets operates 38 stores in California.
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