Daily Reporter staff reports
NEW PALESTINE — The New Palestine Marsh soon will be under new ownership, bringing weeks of uncertainty about the bankrupt grocer’s future to an end.
Two Ohio-based grocery chains have agreed to buy 26 of Marsh Supermarkets’ 44 remaining stores for a total of $24 million, according to court documents.
Fishers-based Marsh is selling off the stores after closing 19, including its Greenfield location, in May and filing to reorganize under the protection of bankruptcy.
The court filing, posted Tuesday, says Kroger Co. entity Topvalco Inc. plans to spend $16 million to acquire 11 Marsh stores, and Fresh Encounter entity Generative Growth II LLC plans to spend $8 million to buy 15 stores — including the Marsh location in New Palestine.
Cincinnati-based Kroger, with 2,800 locations nationwide, already has a huge presence in the area, including a store in Greenfield. In 2015, the company announced a wide-ranging plan to beef up its operations in central Indiana, including creating or remodeling dozens of stores, establishing a regional training center and creating an estimated 3,440 jobs. Greenfield’s store was among those that underwent a remodel in recent years.
Findlay, Ohio-based Fresh Encounter Inc. operates 21 groceries under the store names, Community Markets, Great Scott Community Markets, Sack ‘N Save Supermarket and Chief.
In February, Fresh Markets purchased family-run Remke Markets. Remke, based in Kentucky, operated 10 stores in the Cincinnati area.
Under the various banners, Fresh Encounter operates stores throughout Ohio and eastern Indiana.
Marsh accepted bids on its 44 remaining stores through an auction that convened Monday. The company called managers of the remaining stores to its headquarters for a 12:30 p.m. meeting Tuesday, where executives informed them of the results of the auction.
Officials with Kroger and Fresh Encounter were not immediately available for comment.
The sales, which require bankruptcy court approval, must overcome the objection of Rhode Island-based CVS Health.
The pharmacy chain in April acquired Marsh’s pharmacy accounts and inventory for $38 million. As a condition of the purchase, CVS negotiated that the 37 stores where Marsh operated pharmacies be precluded from operating pharmacies for five years, according to a bankruptcy court filing last week by the pharmacy giant.
According to the court filing by Marsh on Tuesday, “the purchasers are only willing to proceed with the sale transactions if this use restriction is removed.”
Marsh contends the CVS agreement only bars Marsh itself from operating pharmacies at the locations. Further, it asserts that even if the condition does apply to buyers, the language “is unenforceable under the bankruptcy code.”
Marsh operated 116 groceries and 154 convenience stores at the time of its sale in 2006 to Sun Capital Partners. The Florida-based private-equity firm bought Marsh for $88 million in cash and the assumption of $237 million in debt.
Once a homegrown powerhouse, Marsh at the time of the sale was beginning to lose market share to national chains ramping up their grocery business.
In a bankruptcy court filing, Marsh acknowledged its lack of investment, saying it spent just $15 million in the past two years on store remodels while Kroger and Meijer invested a total of more than $100 million.
“While these stores outperformed total chain results, they did not achieve the sales lift that the debtors were anticipating,” the company said.
The sale of the remaining Marsh stores will end an 86-year run for the company. Ermal Marsh opened his first grocery in 1931 in Muncie.
Here’s the list of all 26 Marsh stores that Ohio-based grocers Kroger and Fresh Encounter have agreed to purchase. Twelve are located in central Indiana.
Fresh Encounter’s 15 stores include 11 in Indiana, including one in downtown Indianapolis and four in Ohio. They are:
320 N. New Jersey St. (downtown Indianapolis)
11625 Fox Road, Indianapolis
Columbus (3075 E. 25th St.)
New Palestine (5802 W. U.S. 52)
Marion (1013 Forest Ave.)
Elwood (1515 S. State Road 37)
Hartford City (1711 N. Walnut St.)
Tipton (899 E. Jefferson St.)
Pendleton (3015 W. U.S. 36)
Richmond (501 National Road West)
Greensburg (736 W. Main St.)
Van Wert, Ohio
Kroger’s 11 purchases include the two Marsh stores in Zionsville and the downtown Indianapolis location in the Axis at Block 400 apartment development that just opened in 2014. They are:
227 W. Michigan St. (downtown Indianapolis)
1435 W. 86th St., Indianapolis
Brownsburg (843 E. Main St.)
Fishers (12520 E. 116th St.)
Zionsville (Boone Village)
Zionsville (10679 N. Michigan Road)
Greenwood (2904 S. State Road 135)
Bloomington (1825 Kinser Pike)
Bloomington (123 S. Kingston Drive)
Muncie (1500 W. McGalliard Road)
Muncie (715 S. Tillotson Ave.)
The Indianapolis Business Journal contributed to this report.