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Originally published February 17, 2011 at 1:46 PM | Page modified February 18, 2011 at 6:32 AM

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Haggen family sells majority ownership of grocery chain to Florida firm

After 78 years as one of the Northwest's best-known family-owned businesses, the grocery chain Haggen has changed owners. Comvest, a private investment...

Seattle Times business reporter

Haggen Inc.

Founded: 1933 by Ben and Dorothy Haggen

Headquarters: Bellingham

Supermarkets: 30 Haggen Food and Top Food stores in Washington and Oregon

Employees: 3,100

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After 78 years as one of the Northwest's best-known family-owned businesses, the grocery chain Haggen has changed owners.

Comvest, a private investment firm from Florida, will receive majority ownership for injecting an undisclosed sum into the chain, which includes 30 Haggen Food and Top Food supermarkets in Washington and Oregon. Its headquarters will remain in Bellingham.

It was important to brothers Rick and Don Haggen — who owned the company with their children — that it remain a private company. Their parents, Ben and Dorothy Haggen, started the grocery company in 1933 as Economy Food Store.

"Any supermarket chain our size is always in play," Rick Haggen said during a media conference call on Thursday. "With this investment by Comvest, we're able to remain as an independent supermarket chain with ... probably no change for our customers and very little change for all the people who work in the company."

Haggen has about 3,100 employees, roughly 700 of them in Whatcom County.

Terms of the deal were not disclosed, nor did the Haggens say how much their family will continue to own. It will be a significant minority, and the brothers will stay involved with the company.

CEO Jim Donald, a former Starbucks CEO, will be replaced by Clarence Gabriel when the deal closes next month.

Gabriel worked for more than 10 years with Pepsi-Cola North America and was responsible for merchandising and supply-chain duties for Albertsons. He also was CEO of the video-rental chain MovieGallery, which he left more than a year before it was liquidated.

Donald will remain as an adviser to the company, which he joined in October 2009. He was ready to retire and would have left this year even without the acquisition, Don Haggen said.

The company needed more capital to grow, he said. "Business was better two years ago than it is now, so we've done a lot of cost-cutting things. [This investment] was just a matter of us having more room for growth."

Four months after Donald took the helm, most of the chain's stores stopped staying open 24 hours. He also closed three stores, including a Top Food & Drug store in Redmond Town Center that was formerly part of the Larry's Market chain that liquidated several years ago. Top Food had been there just two years.

"I'll be hanging on his legs as he's trotting out the door," Gabriel joked on the call.

Haggen's customer counts have gone up nicely in the months that Gabriel and Comvest have been tracking them, he said, and prices are "coming in line and getting sharper and more competitive with their surroundings."

No other changes are expected in management, where Gabriel said two senior vice presidents at Haggen used to work for him at Albertsons.

Comvest specializes in providing capital to lower middle-market companies, including Allegiant Air. It does not have other grocery holdings, but its managing director, John Caple, has experience with grocery and retail operations.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

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