Dive Brief:

• Flushing, New York-based Seasons Kosher Supermarkets voluntarily filed for petition of reorganization under Chapter 11 bankruptcy, according to a news release.
• Seasons has $5 million in assets but owes millions to its vendors, landlords and banks. Local reports noted the retailer's shelves have been under stocked and meat deliveries have not gone out for weeks. The company says it has a $6 million commitment in private funding that will allow it to stay in business and pay vendors during its restructuring period. 
• The grocer currently runs eight stores in New York, New Jersey, and Maryland opened its first store in Queens, N.Y. in 2011 and then quickly expanded. The grocer has plans to open a new store in Cleveland but the court filing said the opening is "substantially delayed."

Dive Insight:

Seasons CEO Mayer Gold says the company has investors lined up, and he seems confident the retailer's specialty products and loyal following will help it rebound following a period of financial restructuring.

"With several parties already interested in investing in the company, Seasons anticipates a relatively short reorganization process and bright future as we continue to serve our neighborhoods," Gold said in a statement. 

Despite growing competition, independent specialty grocers are continuing to thrive because they offer products large grocery chains don’t and are often located in areas near their targeted consumers. In Seasons case, that’s Jewish customers in New York City, New Jersey, and Maryland.

Seasons' widespread growth in its eight years was ambitious, but this appears to have contributed to its financial woes. Seasons original stores saw increased sales and were profitable when they first opened, but rapid growth drained its cash flow, according to a Chapter 11 filing cited by New York's Commercial Observer. 

Although filing for bankruptcy seems like big step in the wrong direction for most retailers, it can ultimately help them rebound — provided they have a focused growth plan going forward. Tops Markets filed for bankruptcy in February and earlier this month the grocer received court approval to close 10 underperforming stores and a new pension program which lowers payments for the grocer. Once these two hurdles were crossed, the grocer said it expects to emerge from bankruptcy protection in a few months.

Meanwhile, Southeastern grocer filed for Chapter 11 in March and announced a quick exit in June after slashing its debt load by more than half. It sees store remodels and a reassignment of select stores to its Hispanic and value formats as the way forward.

Seasons decision to file for Chapter 11 gives it the protection it needs to restructure and pay off debts over time while keeping its business alive. Whether it will emerge a stronger competitor or continue to flounder, though, remains to be seen.