Centennial Beverage Group, which recently launched an “inventory liquidation” sale and stated earlier in December that it will not close operations, has filed for Chapter 11 protection in U.S. Bankruptcy Court in Dallas. Centennial will continue operations as a debtor-in-possession under the Chapter 11 Bankruptcy Code. Several other motions were also filed with the courts to ensure minimal impact on its customers, employees and vendors in connection with the bankruptcy filing.
Seeking To Maintain Operations
Centennial is seeking to use the protections and flexibility of the Bankruptcy Code to reorganize operations, resolve outstanding debt, and ultimately exit bankruptcy as a stronger company poised to continue its 76-year relationship with customers throughout the DFW Metroplex. Meanwhile, inventory at every Centennial, Big Daddy’s and Majestic store will continue to offer more inventory discounts ranging from 30% to 70% off regular retail prices.
It’s the first big casualty in a market that turned hyper competitive in the last two years as newer chains entered the Dallas Fort Worth market and opened stores. Also, voters in several metro areas once deemed as “dry” passed laws allowing existing stores run by Kroger, Tom Thumb, 7-Eleven and others to sell beer and wine.
Centennial grew to a chain of almost 70 stores at the height of its expansion. In 2011 it acquired Majestic Liquors in Fort Worth, adding 32 stores and two warehouses. It’s been downsizing ever since and now has just 23 Centennial, Majestic and Big Daddy’s stores, and expected to close additional stores. The company is selling its stores and leasing them back to raise cash. It also is selling and moving out of its warehouse and corporate headquarters in Dallas.
Gregory Wonsmos, Centennial’s president and CEO, in a court filing blamed the bankruptcy reorganization on changes in North Texas laws that opened up competition from supermarkets. And this was followed by the entry of big-box liquor stores, as well as the expansion of a regional chain, Goody Goody’s. “As a result of this pressure, sales have declined — and are currently down approximately 50 percent year over year,” his filing said.
Some in the industry suggested that Centennial might also have made missteps similar to Majestic, by growing too quickly in a hyper-competitive market on borrowed money.