Irvine Ranch Markets Founder Says Some Stores Could Be Sold

Bankrupt Irvine Ranch Farmers Market could sell some of its upscale grocery markets as it reorganizes its debts, the chain’s founder said Monday. But the ailing company has no immediate plans to close stores.

Majority owner and founder Jon Hubbard said that the chain’s finances are being evaluated and that no decisions have yet been made. But he said he foresees no terminations among Irvine Ranch’s 800 to 1,000 workers.

The Costa Mesa-based company--known for its fancy produce and butcher-cut meats--filed for protection from creditors on Friday in U.S. Bankruptcy Court in Santa Ana.

The 20-year-old chain, which has 11 stores scattered from Northridge to San Diego and one in Texas--listed liabilities of $17.5 million in papers filed under Chapter 11 of federal bankruptcy laws.

Hubbard and his attorney, Marc J. Winthrop of Irvine, said the chain’s options include selling or closing stores, managing stores under different ownership, or turning to other operators.

But both stressed that no decisions will be made for at least 30 to 60 days.

It is more likely that the chain would sell--rather than close--unprofitable stores, Winthrop said. “If we can get money and use it to boost the stores--that’s what the reorganization process is all about. A sale is more profitable than a closure,� he added.

“We’re still chewing on the numbers. The company will get a little leaner and a little meaner� in its management, Winthrop said. “But we’ll come out with a solid core that’s profitable.�

What is known is that any possible sales will not include the Horton Plaza Store in San Diego or the store in Dallas, because neither is owned by Irvine Ranch Farmers Market. Instead, both stores are managed by the chain, which in turn is paid a fee.

“We’ll look at them economically and decide whether they’re worth the trouble,� Winthrop said.

Hubbard, who expanded the markets from a single roadside plywood shed in Orange County, took the blame for the chain’s problems. “We expanded too quickly, and I will take responsibility for it,� he said.

Irvine Ranch’s sales reached $82 million last year, up about $7 million from 1986, according to Hubbard. “We’ve got the best team we possibly could have operationally. We’re getting our debt restructured properly,� he said. “I’m confident we’ll turn it around.�

Customers apparently feel that way, too. Several store managers said that while a few customers asked about Irvine Ranch’s future, most shoppers seemed to be unconcerned.

Meanwhile, U.S. Bankruptcy Judge John Ryan on Monday authorized Irvine Ranch to continue to operate by using its available cash until a Sept. 8 hearing. His order was unopposed by the chain’s major creditors.