A.G. Ferrari Foods said Monday that it has closed three more stores and is in discussions with new investors, the latest steps by the San Leandro-based Italian market to reorganize its finances.

Ferrari Foods recently closed stores in Belmont, Palo Alto and Sunnyvale, company executives said Monday. Those closings came after the shutdown of the retailer's North Berkeley store.

Ferrari Foods filed for Chapter 11 bankruptcy on March 28. The retailer listed $3.3 million in assets and $2.4 million in debts, bankruptcy records show.

"Store closures have been completed and we are now in a much stronger position," said Paul Ferrari, chief executive officer of Ferrari Foods.

At the same time, officials are seeking some outside investors who would bring fresh capital to the company.

"We are working with several outside funding groups to solidify our future," Ferrari said.

Ferrari has sought a court order to terminate multiple leases in a quest to ease its financial squeeze.

"The locations are not profitable and are a financial drain" on the company, Ferrari Foods stated, according to court records. The company also is attempting to restructure its lease at its Los Altos store. That store was open for business Monday.

"For now, Los Altos is definitely staying open," said Danielle Bolla, Ferrari's director of marketing.

At the Belmont store, signs related to the shutdown of that location were posted in the windows.


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"Grazie! We have truly enjoyed being a part of the neighborhood and greatly appreciate your business," the sign said. The posters also directed customers to the Los Altos store.

The privately held company's revenues also dwindled during 2010 compared with the year before, according to court records.

In 2010, Ferrari generated $12.4 million in gross income, the court records show. That was down 12.8 percent from the $14.2 million in gross income in 2009 for the retailer.

It's possible that the push by Whole Foods to broaden its footprint in the Bay Area -- coupled with a sour economy -- could have undermined Ferrari's bottom line.

"Whole Foods has been very aggressive in the Bay Area," said Robert Reynolds, principal analyst with Reynolds Economics, a retail consulting firm based in Moraga. "Ferrari could have been hurting at the stores near a Whole Foods or other big competitors."

A delicatessen and a wide selection of prepared meals are among the offerings at Whole Foods.

"Both of those are in direct or indirect competition with an Italian deli such as Ferrari," Reynolds said.

Ferrari Foods was founded in 1919 by Annibale Giovanni Ferrari, who was born in a small town in northern Italy, and modeled the business on the family's store in Italy.

That first store was in San Jose. That store closed in 1921 and a new location was opened in Berkeley's Elmwood district, which is still operating today.

The pastas, sauces, olive oils, vinegars and other offerings at Ferrari markets are chosen to represent items from all 20 of Italy's food regions. Paul Ferrari represents the third generation of Ferraris to guide the family business. He said he's determined to keep the market running.

The retailer is very hopeful it will be able to attract the necessary financing to recapitalize the retailer.

"A.G. Ferrari is such a strong brand," Bolla said. "There is lots of interest from potential investors."

Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.

A.G. FERRARI LOCATIONS
Prior to filing for bankruptcy, A.G. Ferrari had 13 Bay Area stores. It now has nine.

Closed Stores
Berkeley, 2905 College Ave.
Belmont, 1050 El Camino Real
Palo Alto, 200 Hamilton Ave.
Sunnyvale, 304 W. El Camino Real

Open Stores
Berkeley, 2905 College Ave.
Lafayette, 23 Lafayette Circle
Oakland, 6119 LaSalle Ave.
Oakland, 4001 Piedmont Ave.
Corte Madera, 107 Corte Madera Town Center
Los Altos, 295 Main St.
San Francisco, 468 Castro St.
San Francisco, 3490 California St.
San Francisco, 688 Mission St.

Source: Company reports