Chapel Hill’s A Southern Season files Chapter 11, closing 2 stores

Customers shop at the 65,000 sq. ft. Southern Season store at University Mall in Chapel Hill.
Customers shop at the 65,000 sq. ft. Southern Season store at University Mall in Chapel Hill. 2013 News & Observer file photo

In a move to stem financial losses at two stores, A Southern Season has filed for Chapter 11 bankruptcy protection while it reorganizes its gourmet food business to focus on smaller outlets and growing online sales.

Its flagship store in Chapel Hill will remain open.

The Chapel Hill specialty food retailer closed its money-losing store in Richmond, Va., in April, and is in the midst of closing another in Mount Pleasant, S.C. The company is also scrapping expansion plans in Atlanta, Ga., as it focuses on smaller versions of its stores, called A Taste of Southern Season.

The company operates the smaller stores in Cameron Village in Raleigh, as well as Asheville and Charleston, S.C. The company is planning two more in Southern Pines and Wilmington.

But the larger versions of the stores, which include full-service restaurants and delicatessens, couldn’t generate enough cashflow to stay afloat.

“We built a really loyal following there but it wasn’t big enough to support the size of the store,” said chief financial officer Brian Fauver. “With these big stores come liabilities that are not part of our go-forward plan.”

The business, which was started in 1975 by longtime owner Michael Barefoot, undertook expansion after it was bought in 2011 by TC Capital, a Chapel Hill investment fund. The new owner said at the time that it could be a 15-chain store.

The Richmond and Mount Pleasant store each employed about 100 people, Fauver said. Once both are shuttered, the company expects to employ 317 full- and part-time people in its four remaining stores, including the location in Chapel Hill.

A Southern Season did not disclose the extent of its financial losses. In a letter to its vendors, A Southern Season stated: “the law will not allow us to immediately pay invoices outstanding for goods delivered and services rendered prior to Friday.”

A Southern Season expects to come out of bankruptcy proceedings in December.

John Murawski: 919-829-8932, @johnmurawski