Planet Organic officially shuts down; chain had five locations in Calgary
Unable to pay its creditors, natural-foods retailer Planet Organic Markets has shut a chain of stores that spanned three provinces.
The company’s executives sent letters to employees and creditors Tuesday informing them of its demise.
“We have tried to find a solution for the company but now it has come the time to recognize that despite the best efforts to restructure the business, we are at an end,” stated a letter to employees penned by CEO Alan Thompson.
It went on to thank staff for their diligence and to assure them they’d be paid any salary and vacation compensation owed to them.
Planet Organic, which launched in 1993, had operated five stores in Calgary, four in Edmonton and one each in Victoria and Mississauga, Ont.
Earlier this month, the chain shut down one of its newer stores, the Calgary Royal Oak location, citing inventory issues.
As recently as last week, one of its staffers told Postmedia they’d been visited by a company executive who tried to reassure them their jobs were safe.
A source told Postmedia the number of positions affected would be between 300 and 400.
In a March 3 letter to creditors, the company said a secured creditor is owed $18 million “and has a lien on substantially all of the company’s assets to secure payment of the debt.”
“The company estimates that the total amount of other creditor claims is in the range of $12 (million) to $16 million.”
Those creditors can expect to be paid about seven or eight per cent of what they’re owed, states the letter.
One of those vendors said she doesn’t expect to be paid any of what’s due but added she hopes Planet Organic makes good on its promises to compensate employees.
“I stopped sending them stuff a year ago but there were a lot of companies that kept supplying them, which is too bad,” said the vendor, who didn’t want to be named.
“Things aren’t so bad for me — I know companies that are owed hundreds of thousands of dollars each.”
Planet Organic attributed its failure to “reduced demand, contracting margins and increased competition in the health food segment.”
The unpaid vendor agreed with that assessment, adding the company failed or was unable to price its products competitively and expanded too rapidly.
Other company suppliers have told Postmedia that months of efforts to secure repayment or contact Planet Organic have proven futile, with some saying they’ve launched court actions.
“They opened four stores in the past four or five years, which is a lot,” she said.
Planet Organic CEO Thompson didn’t return a request for comment.