About 250 employees were laid off with Sunday's shutdowns. The Phoenix-based chain purchased the stores just six months ago from Fleming Cos., a Texas-based food wholesaler that had been running the locations as ABCO Food stores. Fleming had 55 stores on the market and sold at least half to other grocery chains.
In a letter to employees, Southwest Supermarket's CEO Tony Gioia said operations at the new stores were "very difficult" and further dinged by the slowing economy. Southwest was unable to secure additional funding or find a buyer for the stores.
"I very much regret that it is necessary to take this action," Gioia wrote. "In view of the company's financial condition, however, there simply is no choice."
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