A West Coast grocery deal will create a chain of 49 high-end stores under five brands, including Seattle’s Metropolitan Market and New Seasons Market, all owned by a South Korean retail conglomerate.
Portland-based New Seasons Market said it is closing the Ballard grocery store it opened less than two years ago and abandoning a controversial plan to anchor a Central District development project. Metropolitan Market, a Seattle chain begun in 1971 with seven current locations around the area, will take over New Seasons’ Mercer Island store by mid-2020.
The deal, announced Tuesday, combines 20-year-old New Seasons with three regional grocery chains owned by Good Food Holdings, which was acquired a year ago by E-mart, the grocery arm of Shinsegae Group, a Seoul-based business whose holdings include department stores and restaurants. E-mart paid $275 million at the time for 24 stores including the Metropolitan Market chain and two California chains, Bristol Farms and Lazy Acres, according to a report in the Korea Joongang Daily.
The merger with New Seasons, with 19 stores in its home market of Portland and Southwest Washington, and its five Northern California New Leaf Community Markets locations, gives E-mart a chain of stores focusing on affluent shoppers in cities and suburbs from San Diego to Seattle. Forrest Hoffmaster, who took over as CEO of New Seasons following a management shake-up in early 2018, is joining Good Food Holdings’ board of directors.
Smaller players in the competitive and fast-evolving grocery market face giants who are continually refining their niche as players such as Walmart and QFC-parent company Kroger retool stores to enable online ordering, pickup and delivery, and new competitors, including Amazon, enter the market.
The Ballard New Seasons location, which opened with 150 employees in May 2018 and is now down to 100, is within about a mile of eight other grocery stores, including a new PCC Community Market, the local co-op that is in the midst of a growth spurt, and an Amazon Fresh pickup site. A New Seasons spokesperson called the neighborhood “highly competitive” and said that as a new family of grocery brands, “we are not going to compete with each other in our communities.”
She said the companies are not disclosing deal terms and executives were not available for an interview.
New Seasons, which has some 4,000 employees and has been the target of labor organizers, said it will help employees — 250 including the Ballard and Mercer Island locations — find jobs at Metropolitan Market stores around Seattle or at New Seasons stores in the Portland area, where its brand will remain on stores. It also pledged “job search assistance, transition pay and extended healthcare benefits” for three months for employees who do not move to another company location. The Ballard store is slated to close by the end of the year.
The Central District store was planned for the ground floor of a housing development, but faced pushback from community groups who saw it as another step in the ongoing gentrification of a historically African American neighborhood. New Seasons said it will make an unspecified donation to “nonprofit partners in the neighborhood.” The company said it donates 10% of after-tax profits to community groups surrounding its stores.
Lake Union Partners, the developer of three mixed-use residential projects near the intersection of 23rd Avenue and East Union Street, including one previously slated to include the New Seasons store, did not respond to a request for comment.
Private equity firm Endeavour Capital, which bought a stake in New Seasons in 2013 and currently owns 64%, alongside the grocery company’s founders and longtime staff, was also a former majority owner of Good Food Holdings, which acquired Metropolitan Market in 2012.
The Korea Joongang Daily reported that Good Food Holdings employed 3,100 people and had annual sales of around $598 million.