Editor’s note: This is a developing story and will be updated as soon as information becomes available.
BOULDER — Roughly a month after grocery giant Kroger Co. (NYSE: KR) announced that it would sell its investment stake in Niwot-based Lucky’s Market, Lucky’s appears poised to close dozens of its existing 39 locations, including nearly all Florida stores.
The South Florida Sun-Sentinel reported Tuesday morning the imminent closure of 20 Lucky’s stores. The Montana media outlets also reported the upcoming closure of Lucky’s Missoula and Billings locations. Trade publication Progressive Grocery is reporting the planned closure of a total of 32 stores in 10 states.
Lucky’s, founded by chefs Bo and Trish Sharon, operates local natural-foods grocery stores in Boulder, Longmont and Fort Collins.
The fate of those stores is unclear. As of 1 p.m. Tuesday, Lucky’s had not issued a statement on the closures, and company representatives did not respond to requests for comment.
Kroger announced the divestment in December during its third-quarter financial report to the U.S. Securities and Exchange Commission.
“As part of a portfolio review, we made the decision to evaluate strategic alternatives in relation to our investment in Lucky’s Market,” Gary Millerchip, Kroger’s senior vice president and chief financial officer, said during the earnings conference call last month. “As a result of this review, the company has decided to divest its interest in Lucky’s Market and recognized an impairment charge of $238 million in the third quarter.”
Kroger, the Cincinnati-based parent of King Soopers and City Market stores in Colorado, invested an undisclosed sum in Lucky’s to form a “strategic partnership” with the local chain in 2016
At the time, Kroger leaders said the Lucky’s investment was aimed at boosting Kroger’s “deep ongoing commitment to providing customers with affordable fresh organic and natural foods.” Lucky’s corporate motto is: “Organic for the 99%.”
Kroger CEO Rodney McMullen told analysts last month that based on the “amount of investment that it would take for Lucky’s to be a meaningful contributor to Kroger overall and the efforts that it would take, we just didn’t think it created a good return for the investments that we needed to be made relative to that.”
Lucky’s stores — generally about 35,000 square feet — are much smaller than many other Kroger-branded supermarkets, which can exceed 100,000 square feet.
“It’s hard to figure out that small format model and to make it work effectively,” Millerchip said during the December conference call.
The closure of Lucky’s stores would represent a drastic reversal for the company.
Lucky’s opened seven stores last year, and company leaders told BizWest in September that expansion is expected to continue. Lucky’s website lists more than a dozen new Florida locations that were scheduled to open in 2020.
Tuesday’s closure announcements came after reports surfaced that Lucky’s has abandoned plans to build a new Denver store at The Boulevard at Lowry.