Andronico's Markets is slated to be sold by the end of this week to Renovo Capital, but while the deal would rescue Andronico's, the grocery chain said Tuesday it will close one of its Berkeley stores within days.
The store at 1414 University Ave. in Berkeley will close over the weekend, according to Adam Alberti, a spokesman for Andronico's. The market chain filed for bankruptcy in August.
"Andronico's University Avenue store is probably one of their weakest stores," said Robert Reynolds, principal analyst with Moraga-based Reynolds Economics, which tracks retail trends.
After the Andronico's on University Avenue closes, the chain will have six stores, including three in Berkeleyand one each in Los Altos, San Francisco and San Anselmo.
When Andronico's filed for bankruptcy, the company said it was seeking to sell itself to a buyer that could keep the operation afloat. Andronico's was hobbled by a cash crunch triggered by an aggressive store expansion.
Renovo Capital wound up being that buyer, according to bankruptcy court records. Renovo agreed to pay $16 million for Andronico's, a regional chain founded in 1929. The grocery chain offers gourmet and other specialty foods, along with wine, kitchen gadgets and tableware.
"This purchase will be good for the community, the employees and the customers," said John Murray, a bankruptcy attorney for Andronico's. "Renovo intends to invest significant sums of money into the stores."
Andronico's sales are running about $120 million a year.
A few weeks ago, in a separate transaction, Renovo scooped up A.G. Ferrari Foods, another regional market chain that had filed for bankruptcy this year.
Renovo paid $1.2 million for Ferrari Foods.
"With both companies, we hope to improve the customer experience, the product offerings and the physical facilities," Scott Lavie, a principal with Renovo Capital, said in an interview with this newspaper in September. Lavie didn't return phone calls on Tuesday.
Although Andronico's is closing one of its Berkeley stores, the Renovo deal appears to have saved hundreds of jobs.
Andronico's now employs 470 workers, including 440 at its stores.
The grocery, in an official filing with state officials, issued a notice that it planned to eliminate 24 jobs at the University Avenue store, Employment Development Department documents show.
Despite the hopeful signs that have emerged from Renovo's purchase of Andronico's, plenty of challenges remain, according to Reynolds.
Andronico's must still find a way to survive an invasion in the Bay Area of new supermarkets operated by Fresh & Easy, Sprouts Farmers Markets and Sunflower Farmers Market.
In addition, Safeway is adding new or revamped stores throughout the nine-county region.
And Whole Foods has been opening new stores, including outlets in San Jose and Lafayette, along with plans for a Fremont store.
"The cost will be considerable for Renovo to make some of these Andronico's stores viable," Reynolds said.
Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.