It’s easy to bash entrepreneurs when they’re down. But it’s how entrepreneurs respond to adversity that should dictate the esteem in which they’re held by the public.
The founders of Lucky’s Market, Trish and Bo Sharon, have had a difficult few days — and, we suspect, a difficult few months.
The Sharons founded Lucky’s in north Boulder, quickly establishing a local icon by providing quality food to customers and helping countless natural and organic companies build a customer base. (Shelf space is an extremely valuable commodity for any retailer, and securing that space can set a new natural and organic company on a path to success.)
Lucky’s embarked on a major growth curve in 2016, when it secured a strategic investment from Kroger Co. That investment saw the natural grocer expand from 17 stores to 39, including 21 in Florida alone.
But Kroger’s December announcement that it would divest its stake in Lucky’s proved the death knell for the company’s expansion plans. Barely a month later, word leaked that Lucky’s would close 32 of its stores and cancel plans for 19 additional stores.
Company officials were silent at first — too silent, in my opinion — only taking to social media hours later to provide some clarity about what was happening.
Then came Monday, Jan. 27, when Lucky’s filed a series of bankruptcy filings with U.S. Bankruptcy Court in Delaware. At the time of the filing, Lucky’s had assets of $425 million and liabilities of $600 million. Half of those liabilities — $301 million — were to Kroger, which had provided a series of loans to fuel its expansion.
With Kroger pulling out of its Lucky’s investment, the chain was left with little choice but to close and/or sell the bulk of its stores. And a bankruptcy was an inevitable next step, providing probably the only way to get out of dozens of leases and other contracts around the country.
But Lucky’s still might emerge — smaller, but stronger. On Jan. 29, the company announced that the Sharons would purchase the seven Lucky’s stores that it had said would remain open, including the original north Boulder location and one in Fort Collins.
That sale, as well as others to Aldi, Publix and Southeastern Grocers, are subject to approval by the bankruptcy court.
Many will fault Kroger for Lucky’s travails, arguing that the grocery giant pulled the rug out from under Lucky’s. Others will fault the Sharons for growing too big, too fast and accumulating too much debt.
But entrepreneurship inherently entails risk-taking. It entails learning from one’s mistakes. It entails overcoming obstacles. Most importantly, it entails not wanting a dream to die and being driven to recover what worked, rebuild and move on.
It would be easy for the Sharons to walk away, to sell or close the remaining stores, to abandon the dream. But that’s not what entrepreneurs do.
Good luck, Lucky’s.
Christopher Wood can be reached at 303-630-1942, 970-232-3122 or firstname.lastname@example.org