Experts: Marsh purchase doomed from start | 2017-05-20 | Indianapolis Business Journal – Indiana News

Experts: Marsh purchase doomed from start | 2017-05-20 | Indianapolis Business Journal –  Indiana News

In 2006, when Sun Capital Partners bought Marsh Supermarkets, the bet looked risky at best.

The Fishers-based company, which boasted 116 groceries and 154 convenience stores at the time, was hemorrhaging money, losing $13 million in the two previous quarters.

Once a homegrown powerhouse, Marsh was beginning to lose market share to national chains ramping up their grocery business. The bleeding would only get worse, with specialty grocers such as Whole Foods and The Fresh Market entering central Indiana, and Kroger investing millions to expand.

Perlstein

“The whole grocery war in our city exploded,” recalled Mark Perlstein, a retail broker at CBRE. “With all the competition coming in here, it made it very difficult for Sun Capital to survive when [Marsh] wasn’t the single focus of its business.”

Sun Capital, a Florida-based private-equity firm, bought Marsh for $88 million in cash and the assumption of $237 million in debt, with hopes of turning around the company’s fortunes and unloading it quickly for a tidy profit.

But in the decade since, Marsh has limped along, trailing much of the competition and steadily closing stores. In recent months, the pace of closings accelerated, as delinquent-payment lawsuits from landlords and vendors piled up.

Marsh’s struggles culminated on May 11, when the company filed to reorganize under the protection of bankruptcy, saying it will close its remaining 44 stores if it cannot find a buyer for all or parts of the chain. Bids will be taken until June 7, with an auction set for June 12.

The bankruptcy raises the question of whether Marsh was too far gone to salvage, or if the…

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