Sunday, June 26, 2016

Southern Season Plans to Cancel Atlanta Store In Chapter 11 Filing

The would-be Southern Season at Powers Ferry Square in north Buckhead 
Southern Season files for Chapter 11 bankruptcy.

Chapel Hill, N.C.-based Southern Season filed for Chapter 11 bankruptcy protection on Friday.  The filing is in an effort to stem losses at the gourmet food emporium and streamline operations to emerge leaner and more stable.  The company plans to exit bankruptcy by December.

The filing comes on the heels of the chain's closure of their 53,000 square foot store in Richmond, Virginia this April. Earlier this week the chain also announced it will be closing its 44,000 square foot store in Mount Pleasant, S.C.   The Mount Pleasant store opened in 2013 in a former Food Lion, but like the Richmond store, proved too large to be profitable.  
When news broke of the Richmond closing, I spoke with Dave Herman, Southern Season's President & COO, about the planned Atlanta store in Buckhead.  Herman indicated plans for the approximately 25,000 square foot store in Atlanta were still moving forward but that the opening had been pushed from the spring to the summer.  While I have been unable to reach Herman again for comment, a press release distributed by company CFO Brian Fauver indicates the Atlanta store will not open.    

Raleigh's The News & Observer was the only publication I could find to have verified this.  They shared with me the press release they obtained.  

"It [the Company] had plans to open a 25,000 square foot store in Atlanta in late September.  Under the plan to be filed, these three leases [Richmond, Mt. Pleasant & Atlanta] are expected to be rejected to allow the Company to focus on the smaller store growth plan and to strengthen its balance sheet and emerge from Chapter 11 within six months."  
Plans sit idle for the would-be Southern Season store in north Buckhead 
The most recently filed building permit on file with the City of Atlanta is dated June 10th  and describes work as "Southern Season Interior alteration of an existing tenant space for a new specialty food tenant. Scope includes new grease traps and truck well."  The estimated cost of the work is $800,000.  

I visited the property this weekend and while it was evident that it was an active construction site, it seemed plausible that work had stopped days prior.  

Store associates at Southern Season stores in Chapel Hill and Raleigh confirmed that plans for the Atlanta store have been canceled.  
The current exterior of the would-be Southern Season store in north Buckhead 
The Atlanta store was first announced this past August to be coming to Regency Center's Powers Ferry Square in North Buckhead

Going forward, the 41 year old chain plans to gradually expand its smaller format "Taste of Southern Season" store, of which it currently has two (Charleston and Raleigh), with a third expected to open July 1st in Asheville.  

Additional Taste of Southern Season stores are set to open before Christmas in Wilmington and Southern Pines, N.C.

The Atlanta store, while far smaller than the "megastores" in Richmond and Mt. Pleasant, was still larger than the "Taste" stores which on average will measure 4,000-7,000 square feet. 

The successful 59,000 square foot flagship store in Chapel Hill, N.C. remains profitable and is will reportedly be unaffected by the filing.  

Are you surprised that the Atlanta Southern Season store has been cancelled?  Do you think Southern Season will find extended success in their smaller format "Taste of Southern Season" stores?  What would you like to open in the would-be Southern Season space in Buckhead?

Please share your thoughts below.  


Anonymous said...

I used to live in North Carolina and was really looking forward to Southern Season coming to Atlanta.

However I was wondering how they would do in a saturated market with Whole Foods, Fresh Market, Sprouts and Trader Joes.

Honestly Southern Season is a great store but I don't think they need to expand out of their initial market.

Anonymous said...

What we REALLY need in Buckhead is a terrific Patisserie and Boulangerie owned by French bakers/owners! The only really good Frenh bakery near Buckhead is Maison Robert out near the Chamblee Marta station...........which is excellent, but it would be wonderful to have a truly authentic French bakery in the heart of Buckhead.
Henri's makes a great sandwich but their pasteries, etc. are quite inferior compared to a Patisserie!! The Southern Seasons spot would be great........or in the Buckhead West/East villages.

Anonymous said...

The small store model is what they should have done all along but giant, beautiful stores matched the CEO's giant ego. The company is owned by an capital investment group so the whole plan has been to make everything look pretty to investors and possible buyers and create a chain with potential even if there were no profits. There is still hope but with the current leadership I doubt they will ever dig out of their huge hole.

Anonymous said...

No surprise. They'll continue to do well if they concentrate near home in NC and internet. Expansion is not always best for success.