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.
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 Inc. reported its liabilities were between $100 million and $500 million, while its assets ranged between $10 million and $50 million. The company is paying Portland-based Tonkon Torp law firm nearly $360,000 to help it navigate reorganization efforts.
C&K's largest creditors are THL Credit of Los Angeles and Endeavour Structured Equity & Mezzanine Fund I of Los Angeles, owing both more than $14.9 million. The top vendor creditor is Supervalu of Hopkins, Mo., owed $5.3 million. C&K owes Western Boxed Meat of Portland $2.3 million, United Salad Co. of Portland $876,000 and former Tarks Market owner Ron Ridgway $593,000.
Among other major creditors are: Bigfoot Beverages of Eugene ($414,000), Umpqua Dairy Products ($390,000), VPD IV of Sacramento ($387,000) and J B Hunt of Lowell, Ark., ($362,000).
The company is seeking a $7 million debtor in possession loan from 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.
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.
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.