Organic Avenue lives on: it’s reopening after assets sold for $1.7M
Dec 3, 2015, 2:25pm EST
Teresa Novellino Entrepreneurs & Enterprises Editor, Upstart Business JournalNew York Business Journal
Organic Avenue, which abruptly shuttered its stores in mid-October, now has a new investment group owner that acquired its assets and reportedly has plans to reopen the popular Manhattan-based destination for organic juices and other plant-based foods and snacks as soon as early next year.
On Nov. 20, the Chapter 7 bankruptcy trustee Jil Mazer-Marino, declared Arrow Equity Fund LLC’s $1.7 million bid to be the highest bidder at a bankruptcy auction. That auction happened just four days after New York-based Keen-Summit Capital Partners LLC, which handles real estate and M&A transactions for financially troubled companies, had solicited a $1.63 million stalking horse contract for the chain, which operated 10 stores in Manhattan. The sale, approved Nov. 24 by the U.S. Bankruptcy Court for the Southern District of New York, closed Wednesday.
“The whole process went unbelievably quickly, and it had to,” Harold Bordwin, Keen-Summit Capitals principal and managing director told New York Business Journal Thursday. “It loses steam, and every day that it’s closed, the rent is accruing, so you’re losing value, whatever you’re selling it for.”
The acquisition includes real estate leases for the stores, the intellectual property of the business, and the Queens, N.Y.-based commissary with all of the equipment. Similar deals usually take at least two to three months, but the Organic Avenue deal was roughly a month start to finish, from putting together information on the business, getting it out to the marketplace, getting interested buyers signed on confidentially, and having an auction, Bordwin said.
After 19 prospective buyers had executed confidentiality agreements, Keen-Summit solicited a total of eight bids for all or a portion of Organic Avenue’s assets. The bankruptcy auction included competing bids from retailers, an investor in intellectual property, machinery and equipment bidders, and landlords.
A representative for Arrow Equity Fund could not be immediately reached for comment Thursday afternoon on exact reopening dates or plans, but Robert J. Tramantano, director at Keen-Summit Capital said an attorney for the New Jersey-based owner expressed during the bankruptcy proceedings that it wanted to reopen within 45 days after it closed the sale, which means it could be open in mid January, if all goes as planned.
He also said that the company has other investments in the food sector.
When Organic Avenue announced it was closing in mid October, employees were told the day before that the stores would shutter the following day and it appeared that the business was being left for dead. Fans of the Organic Avenue brand, which was a favorite of nutritionists, yoga practitioners and the stylish alike — Goop founder and actress Gwyneth Paltrow among them — took to social media to bemoan the closing.
We’ll update you when we learn more about the new owner’s plans.