Thursday, October 18, 2018

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The contraction of Gordy's Market from 26 stores to 6 is the Leader-Telegram's top news story for 2017

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    Gordy’s Market on Bay Street in downtown Chippewa Falls will remain with the Schafer family after a year of store sales.

    Staff photo by Marisa Wojcik
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CHIPPEWA FALLS — The first official sign of trouble came in March, when EGP, a distributor of Keebler baked snack foods, filed a lawsuit against Gordy’s Market, claiming the grocery store owed the company $38,000. The debt was quickly paid, and the lawsuit was dropped.

However, it was a sign of problems to come, as Gordy’s Market shelves were becoming barren over the summer months. On July 25, the company suddenly shuttered the Hayward store without warning; more stores would close in the following weeks, including one in Chippewa Falls and two in Eau Claire.

Then, on Aug. 23, food distributor Nash Finch filed an $86 million lawsuit against the grocery chain. By Dec. 7, 1,400 separate creditors filed proof of claims totaling an additional $50.75 million, and Settlers Bank filed a claim of $5 million.

By the end of the year, 20 of the 26 Gordy’s Market locations had either been sold or closed, leaving just six in the company’s portfolio. The collapse of the grocery chain, which had stores from La Crosse to Hayward, was voted as the top news story of the year in the Chippewa Valley by Leader-Telegram editorial staff.

Jeff Schafer, who returned to the company in March after a half-year sabbatical, is now leading the new, smaller team. Joining him are his brother, Dan Schafer, as head of finances, and Jeff’s son, Nick, as head of merchandising. The Schafers acknowledge it was a mistake to expand from two stores to 26 in a span of just 12 years.

“The growth happened so fast, it just wasn’t organized,” Dan Schafer told the Leader-Telegram earlier this month. “It was a lot more complex than we originally thought.”

The Schafers were able to keep the following six stores: Chippewa Falls downtown, Chippewa Falls on Lake Wissota, Barron, Chetek, Cornell and Ladysmith. They acquired the stores Dec. 11 through an auction and working out an agreement with SpartanNash, the new corporate name of Nash Finch.

“We wanted our core stores — we know where our roots are,” Jeff Schafer said. “I can be in all six stores every week. You can’t be in all 26 stores — it just didn’t work.”

SpartanNash was the highest bidder, buying the six stores at the auction for $19.8 million. The food distributor then agreed to assign its interest in the purchase to Gordy’s Market Inc. This agreement allows the Schafers to retain ownership of the six stores and keep 340 employees on the payroll.

Some of the stores, like in Stanley, were never sold. Others, like Chippewa Falls south and Rice Lake, remain shuttered and aren’t reopening as grocery stores.

Other former Gordy’s Market locations have opened as other grocery stores. For instance, Festival Foods opened two of the stores in Eau Claire and another in Tomah. Great Lakes Food reopened the stores in Osseo and Augusta.

There are still a few details being hammered out in court, such as determining the ownership and who has the right to lease the Neillsville building, and determining the ownership of interior fixtures in the former store on Hamilton Avenue in Eau Claire.

Contact: 715-723-0303,

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