AppleTree Markets

AppleTree Markets is a Texas grocery chain that was formed in 1988 with stores from Safeway's Houston division. The division once comprised of 99 stores in the Houston and Austin regions. As of January 21, 2007, the chain operated two locations in Bryan, Texas, its current headquarters.

History

afeway

Safeway put its 18-year-old Houston division up for sale in 1988 in an effort to raise money to pay off debts from a $4 billion leveraged buyout in 1986. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1988_550456 Local firm to buy 99 Safeway stores] , "Houston Chronicle", June 14, 1988.] On June 14, 1988, Safeway agreed to sell its Houston division to Texas Supermarkets Inc., a holding company formed by local investors Duncan Cook & Co. and the Sterling Group. The deal included 50 stores in Houston, 20 in Austin, stores in 23 other communities in East and Central Texas, along with a distribution center, frozen food warehouse, bread manufacturing plant and milk processing plant. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1988_550457 Sale of local Safeways severs Texas ties] , "Houston Chronicle", June 15, 1988.] At the time of the $174 million transaction, Safeway's 18 percent market share ranked third in the Houston market behind Kroger, with 27 percent, and Randall's Food Markets, with 21 percent. [http://www.chron.com/CDA/archives/archive.mpl?id=1988_573834 Safeways drew $174 million/South Texas deal detailed] , "Houston Chronicle", September 30, 1988.] M. Dean Gantt, the former Houston division manager, assumed the position of president and chief executive officer of Texas Supermarkets Inc., which initially owned only eight of the stores from the transaction and leased the rest from Safeway. Texas Supermarkets was allowed to operate under the Safeway banner until June 28, 1989, but it would continue to do so until until a new name began appearing in July 1989—AppleTree Markets. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1989_636174 Texas Safeway stores getting new name] , "Houston Chronicle", July 13, 1989.] Five stores were renamed Budget Stores, stores with slightly lower prices on some items and fewer speciality shops such as delis, bakeries, and floral shops. The last of the Safeway banners was replaced in September 1989.

Gantt retired abruptly in October 1989 and was replaced a month later by Arthur L. Patch, senior vice president of Dublin, California-based Lucky Stores Inc. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1989_667286 Ex-Safeway exec to head AppleTree] , "Houston Chronicle", November 30, 1989.]

Bankruptcy

After failed attempts to restructure debt from its buyout of the Safeway division, [ [http://www.chron.com/CDA/archives/archive.mpl?id=1991_789764 AppleTree gets $10 million line of credit] , "Houston Chronicle", June 19, 1991.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1991_805003 AppleTree gets $120 million loan] , "Houston Chronicle", August 23, 1991.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1991_824842 Proposed AppleTree buyout dissolves] , "Houston Chronicle", November 26, 1991.] AppleTree sought Chapter 11 bankruptcy protection in 1992. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1028426 AppleTree files for Chapter 11] , "Houston Chronicle", January 3, 1992.] Soon after the filing, AppleTree announced its plans to begin closing stores. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1034053 AppleTree plans to close five stores] , "Houston Chronicle", January 31, 1992.] Arthur Patch resigned his post in March 1992, and the chairman of the company's board, Fred R. Lummis, took the helm. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1044219 AppleTree chief resigns position/Grocery chain to close five stores] , "Houston Chronicle", March 21, 1992.]

To cut costs and raise cash, AppleTree continued to close stores or sell its stores to competitors such as Fiesta Mart, Gerland's Food Fair, and Market Basket. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1051080 AppleTree selling 8 stores, including 4 in Houston area] , "Houston Chronicle", April 24, 1992.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1058026 AppleTree sells eight more stores] , "Houston Chronicle", May 28, 1992.] The company would also look to move its headquarters to a smaller facility, [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1051210 AppleTree to look for smaller home/Current headquarters too big, costly] , "Houston Chronicle", April 25, 1992.] as well as close its distribution warehouse. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1056271 AppleTree shutting warehouse/Grocery chain to ax 150 workers] , "Houston Chronicle", May 19, 1992.]

In its reorganization plan, AppleTree announced plans to close or sell 33 additional stores. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1052706 AppleTree hopes to shed more stores/Reorganization plan would close 33 sites] , "Houston Chronicle", May 2, 1992.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1053412 Japanese may have slice of revamped AppleTree] , "Houston Chronicle", May 5, 1992.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1081807 AppleTree creditors accept plan/Japanese bank would be biggest shareholder] , "Houston Chronicle", September 18, 1992.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1992_1084169 AppleTree revival plan gets boost/Japanese bank obtains approval to raise stake] , "Houston Chronicle", September 30, 1992.]

Post-bankruptcy

As a result of the reduction of stores, AppleTree's northwest Houston grocery distribution facility, which included a 119,000-square-foot refrigerated warehouse, a large bakery and a major milk plant, was larger than AppleTree's needs. The facility was still owned by Safeway, and it was sold to H-E-B. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1993_1144252 HEB buys Safeway warehouse/Chain expands in northwest area] , "Houston Chronicle", July 30, 1993.] As a result, AppleTree would buy its dairy products from a supplier and also relocated its headquarters to a building in northwest Houston.

AppleTree announced in November 1993 it would sell its remaining 49 stores to competitors. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1993_1166202 Grocery wars uproot AppleTree/Chain selling all its supermarkets] , "Houston Chronicle", November 16, 1993.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1993_1167927 Competitors carve up AppleTree/Nine rivals purchase 28 stores] , "Houston Chronicle", November 25, 1993.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1994_1175969 AppleTree closings surprise some/New owners preparing to reopen] , "Houston Chronicle", January 6, 1994.] [ [http://www.chron.com/CDA/archives/archive.mpl?id=1994_1177018 AppleTree store sold] , "Houston Chronicle", January 12, 1994.] Eleven stores were sold to Kroger, five stores to Gerland's, four to Fiesta Mart, three stores to Rice Food Markets, 15 to Randall's Food Markets (including 12 Central Texas locations, of which three were closed), and one store each to H-E-B, Cox's Foodarama, Big Chief Super Markets, Stanley Stores, Super Warehouse Foods, and Sellers Bros.. Ironically, some of the former Safeway stores Randall's purchased from AppleTree became part of Safeway once again when Safeway bought Randall's in 1999.

AppleTree chief executive Tony Kubicek purchased the last six AppleTree stores and planned to operate the stores as an independent, Houston-based chain bearing the AppleTree name. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1994_1217922 Six stores to keep AppleTree name/Sites seen as seeds for growth] , "Houston Chronicle", August 4, 1994.] Three of the stores were in Bryan-College Station, two in Houston, and one in Huntsville.

Current operations

AppleTree closed its last Houston location in 1997. [ [http://www.chron.com/CDA/archives/archive.mpl?id=1997_1425951 Last apple on the Houston tree/AppleTree cuts loose lone store] , "Houston Chronicle", July 23, 1997.] With the closing, AppleTree operated three stores in Bryan-College Station, where it would eventually relocate its corporate staff and also where chief executive Tony Kubicek 35 years earlier sacked groceries at a Safeway store when he was a student at Texas A&M University.

AppleTree further retrenced to its two Bryan locations after closing its College Station store. [ [http://www.btutilities.com/news/pdfs/200403BTUTCP.pdf Bryan Grocery Stores (PDF)] , Bryan Texas Utilities, March 2004.]

References