PAINESVILLE, Ohio -- As news spread Friday that Convenient Food Mart and its parent company CF Capital Assets LLC had filed bankruptcy a day earlier, among the most surprised were the company's franchisers. This is the first I've heard about this bankruptcy, said Greg DeSantis, owner of CFM's Region 38 based in Wheeling, W.V., upon receiving a CSP Daily News Flash about the bankruptcy on Friday. I've talked to some of the other regionals, and none of us fully understand what transpired at this point.
What DeSantis is sure of is that he wants his branch [image-nocss] of the company, which runs 24 stores, to continue business as usual despite what is happening with its parent firm. As the days pass, we'll be able to find out more information and what this means for the Convenient Food Mart company as a whole, said DeSantis, noting that he had not heard anything from the corporate headquarters. For us and for the other regionals, I don't feel it will have any effect on us whatsoever.
CF Capital Assets, aka Convenient Food Mart Inc., quietly filed Chapter 11 bankruptcy about 400 miles from its Painesville, Ohio, headquarters in Wilmington, Del., where the company's attorney is based, according to court documents. The company listed assets and debts each of $1 million to $10 million. Its largest creditor was listed as Lyden Oil Co. of Youngstown, Ohio, with a claim of $465,000. A Chapter 11 filing means the company intends to go through reorganization rather than close up shop completely.
No reason for the filing was provided, and attempts to reach both CEO John Call and attorney Michael DeBaecke for comment were unsuccessful. A source at Convenient Food Mart's office said a statement was forthcoming from Call. It was not available at press time.
DeSantis said, I did understand that they were having some difficulties, but I really haven't had much time to gain any insight into what happened. He would not elaborate further.
Chapter 11 bankruptcy is familiar territory for the company, which went through reorganization in the late 1980s and early 1990s. After getting back on its feet in 1992, the company gained attention for its foodservice and coffee programs. More recently, however, the company's tired model that never repositioned itself led to last week's action, according to one industry consultant.
During the 1989 bankruptcy, Convenient Food Mart's woes were said to have stemmed from poor management decisions and the burden of leveraged debt that came with growing too rapidly at the retail level. At the time, the company was one of the largest convenience chains in the country at 1,375 stores. The company currently has 325 stores in Illinois, Indiana, Missouri, Nebraska, New York, Ohio, Pennsylvania and West Virginia, according to the company's website.
The chain was founded in Chicago in 1958 by William Bresler and Walter Schaub with the goal of providing customers a miniature supermarket for speed and convenient service. After launching in the nation's heartland, the concept quickly spread throughout the Midwest and East Coast through both company-owned stores and franchisees.