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Ray's Food Place parent company files for bankruptcy

The region's largest independent grocery chain has filed for Chapter 11 court protection and said it will sell or shutter at least 16 of its 60 stores.

Brookings-based C&K Market Inc., parent of Ray's Food Place, Shop Smart, C&K Market and LoBuck$ stores in Oregon and California, filed Tuesday in U.S. Bankruptcy Court for the District of Oregon in Eugene.

Two Jackson County grocery stores and three in Josephine County are among the 16 slated to be sold or closed, according to C&K Market's website. About 20 percent of the company's 2,500 employees will lose their jobs.

The Shop Smart on Crater Lake Highway in White City and Ray's Food Place in Phoenix are on the closure list, along with Ray's Food Place stores on Seventh Street and Williams Highway in Grants Pass, and another store in Murphy. The company's store in Yreka, Calif., also is scheduled to be closed or sold.

In announcing the restructuring move Tuesday, C&K said its operations are expected to continue as normal throughout the bankruptcy process, as it develops a reorganization plan.

"Entering Chapter 11 was a difficult decision for our family," said Doug Nidiffer, chairman of the board, in a statement. "We seriously considered our options, and believe this approach is in the best interest of many of the communities we've served over the years. We will retain about two-thirds of our 60 stores, tighten our corporate structure, and shed legacy costs."

C&K Market said it will seek approval of a debtor-in-possession financing facility with U.S. Bank.

"The decision to sell or close about a third of our stores was extremely difficult," said Gregory L. Sandeno, president of C&K Market. "We appreciate the dedication and hard work of all of our employees and are saddened that some cannot continue with us. We anticipate we will eliminate approximately 20 percent of our positions, as a result of selling or closing stores and restructuring on the corporate side."

The company's website said competition from discounters such as Costco and Walmart have put pressure on its sales and margins.

"As competition increased from larger grocers and mega-stores, more people left their communities to shop in those stores," C&K posted on its website. "Sales declined in some of our stores, forcing us to realize that we could no longer operate profitably in some markets. Selling or closing about a third of our stores was a difficult, but necessary, move to ensure our viability, and will allow us to continue serving as many customers as possible. We are saddened that some will no longer work with us, and we will assist them in their job search."

The Phoenix Ray's is located three miles from the south Medford Walmart superstore that opened in 2012, while the Shop Smart in White City is four miles from both the north Medford Walmart superstore, which reopened in September, and one in Eagle Point. However, Ray's in Eagle Point — virtually across the street from a supercenter — will remain open.

A year ago, the grocer announced plans to move its real estate, construction, training and some of its human resources activity to the former Ticor Title building at 850 O'Hare Parkway in Navigators Landing near the Medford airport. Company spokesman Grant Lunde said there were no plans to abandon the satellite office.

Sandeno said the company expects to emerge stronger and leaner.

C&K Market was 29th on Supermarket News' list of top small chains and independents in the country. The company also operates Ray's stores in Jacksonville, Central Point, Talent, Rogue River and Gold Hill.

The company said last month it will sell 15 pharmacies, operating as Pharmacy Express, Tiffany's Drugs and Chetco Pharmacy & Gifts in Southern Oregon and Northern California. Lunde said the pharmacies are being divided up among four buyers, but only one deal has been closed — the Central Point Pharmacy Express has been acquired by Albertsons.

"We started by selling our pharmacy businesses," C&K said. "That decision was part of our decision to focus on our core business of operating community grocery stores."

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter @GregMTBusiness, and read his blog at www.mailtribune.com/Economic Edge.


C&K Market Inc. stores in Jackson County in a larger map

Ray's Food Place shoppers Salvador Sabino and Noelia De La Cruz learned about the Phoenix store's impending closure while shopping Tuesday. C&K Market Inc. announced it would close or sell 16 of the company's grocery stores in Oregon and California after filing for Chapter 11 bankruptcy. The Ray's Food Place in Phoenix is one of the stores on the company's list to be closed or sold.