What's next for Sickles Market? The inside story of how Little Silver landmark collapsed

• Sickles Market, a 116-year-old landmark family business in Little Silver, seemingly collapsed out of nowhere this spring.
• Bankruptcy court filings revealed "huge" operating losses as the store and its Red Bank expansion never recovered from the pandemic.
• The future is up in the air for property, which could be turned into houses, or another owner could take over some or all of the store.

LITTLE SILVER - What's next for Sickles Market?

The fate of the now-closed Sickles Market is in the hands of a U.S. bankruptcy court judge. It's a stunning epitaph for a 116-year-old family business with deep roots in Monmouth County.

The abrupt closure of Sickles in Red Bank in February and later Sickles Market, its landmark homebase on Harrison Street in Little Silver, in March has resulted in lawsuits from vendors and suppliers, bankruptcy filings, lost jobs and uncertainty.

In a court document filed Tuesday as part of owner Bob Sickles Jr.'s bankruptcy case, Sickles outlined several possibilities for Sickles Market, its garden center, kitchen and property at 1 Harrison Street, and a house at 5 Harrison Street that he also owns. All require court approval.

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According to court documents, they are:

The sale of the property

A "well-known developer" has expressed interest in purchasing the property, which is owned by Sickles through AHS Realty LLC, for a price "in the range of $10 million," court papers state. The six-acre property, recently appraised at $10 million, is zoned for residential use, even though it has been used by Sickles Market for decades. Sickles said he intends to hire a commercial real estate broker in regards to selling the property.

In court papers, Sickles said he met with Little Silver officials who noted that new development should include low-income housing.

"In summary, any developer who wishes to build houses, condominiums, etc. on the property would be required to devote a portion of the development to low-income housing," Sickles said in his certification. The sale of the property is estimated to take three to five years.

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The return of 'Sickles Market'?

Sickles wrote that a "number of parties" have come forward with a wish to lease all or the majority of Sickles Market's space and are prepared to pay Sickles Market and Sickles "a substantial cash payment in exchange for the trademark Sickles name, the kitchen, other facilities at the market, and the commitment by me and my daughters to accept employment from these prospective purchasers."

The property can be subdivided so the market can operate under new ownership and the balance of the property sold for residential development, Sickles wrote.

A short-term lease of Sickles Market

Sickles is exploring the leasing of the market, the garden center and the house at 5 Harrison on a short-term basis during the time required for any buyer "to obtain approvals and overcome any resistance from residents of Little Silver."

What about the garden center?

The broker is seeking an operator who would be interested in taking over operations of a "turnkey" garden center. The garden center, which has three greenhouses and is located adjacent to the market, is fully stocked and operational, according to the affidavit.

Sickles Market, started on land first farmed by Bob Sickles' grandfather, Harold Sickles, more than 100 years ago, imploded after it abruptly closed its Red Bank market in February. A month later, Sickles Market in Little Silver, founded in 1908, closed for good too.

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The story behind the collapse

In his certification, Sickles pointed to the COVID-19 pandemic, its aftermath and losses at the new Red Bank store as the start of the company's decline.

You can read the full certification at the bottom of this story.

In 2019, the Sickles family decided to open a second market and Bottles by Sickles, a liquor store in Red Bank, taking out a $2.5 million commercial mortgage and a $1.1 million line of credit from Two Rivers Bank. The stores opened on Aug. 6, 2020, at the Anderson Building, a renovated and remodeled warehouse on Monmouth Street in Red Bank's westside.

There were big problems. The opening coincided with the height of the COVID-19 pandemic, Sickles said. The stores had less available parking than expected and foot traffic from commuters decreased.

It also was difficult to find experienced food retail workers as costs increased at the markets in Red Bank and Little Silver.

"At the height of the pandemic, sales at Little Silver averaged 20% below prepandemic levels," Sickles said in his certification. "In Red Bank, the pandemic essentially choked the opening and prospects for the Red Bank operation."

The market's expansion into Red Bank never took hold. "Due to the consumer behavior changes after the COVID pandemic, the Red Bank store never accumulated the foot traffic and commuter traffic that the space was planned for," Sickles wrote.

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'Huge' operating losses

But faced with a lease with building owner Metrovation, which was personally guaranteed, Sickles said "there was no choice but to move forward into a very different retail world than was planned for with a very expensive $34-per-square-foot of rent."

"The operating losses of the Little Silver and the Red Bank Markets were huge," Sickles wrote.

With the hope that the pandemic's end would return the Little Silver store to profitability and lead Red Bank to make a profit, Sickles refinanced the Two Rivers loan through Northfield Bank. With proceeds of about $5 million, it was secured through a first mortgage on the Little Silver property, a mortgage on Sickles' home in Rumson and the equipment and fixtures at both properties and a lien on all assets, court papers state.

"Unfortunately, even with the Northfield funding, the markets were unable to stem the tide of losses," Sickles wrote. "The Red Bank Market continued to lose money on an ongoing basis and the Little Silver Market never regained its prior profitability."

The Sickles family used "every resource available to them, including the debtor's 410(k) account, to attempt to keep the 'ships afloat.'"

The rent in Red Bank became "significantly delinquent" and a decision was made to close the store on Feb. 15. Bottles by Sickles closed on April 17 after eviction proceedings and filed for bankruptcy protection on April 23. On March 11, Little Silver closed, unable to fund its payroll.

Between January and March, 117 employees were laid off. The New Jersey Department of Labor and Workforce Development has assessed claims against Sickles for $277,799.63 in unpaid back wages, as well as an administrative penalty of $27,779.96 and a $1,150 penalty, court papers state. On April 29, Sickles wrote that he was notified of "potential personal liability" to the Labor Department as a result of the back wages.

Sickles Market had problems paying other bills besides wages.

In his certification, Sickles said the businesses could not pay approximately $750,000 in sales tax due to unanticipated financial difficulties. The state of New Jersey has told him he is personally liable for the amount due.

Employees stuck with medical bills

In an April 5 company memo shared by former employees, Sickles wrote that the company's employee health care coverage was terminated on Feb. 29 after it was unable to pay its health care carrier for back premiums. Continued coverage through COBRA was not available, the memo said.

Eatontown resident Maegan Rasmussen, who worked for Sickles Market for nearly three years, said workers were told they would have health care coverage through March, only to find out in the April memo that the coverage ended on Feb. 29. Rasmussen now faces an unexpected $82,000 in medical bills as a result of a March procedure, according to a benefits claim summary.

Sickles' legal troubles have continued to mount as the stores' suppliers have filed lawsuits for over tens of thousands of dollars in unpaid bills. In court papers filed in the Bottles by Sickles bankruptcy case, Farmland Produce LLC, Four Seasons Produce and C. Rooney Produce Co. Inc. said they are owed a total of more than $380,000. Farmland said the balance goes back to October 2023.

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'Once in a millennium combination'

In his certification, Sickles said he is committed to working to make sure that all creditors are paid in full.

"I wish the court to understand how devastated my family and I are with regard to the financial difficulties we now face," Sickles said. "For years, my family has been a pillar of the Little Silver community, establishing personal relationships with most of our customers. We have always acted responsibly and honorably in all our endeavors.

"Only a once in a millennium combination of an ill-timed expansion and a worldwide pandemic could have resulted in the downfall of our 116-year-old company," he wrote.

The ordeal has "taken a tremendous toll on me physically and emotionally," Sickles said. "I fought hard to save the business and pay my creditors, perhaps too long and too hard."

David P. Willis, an award-winning business writer, has covered business, retail, real estate and consumer news at the Asbury Park Press for more than 25 years. He writes APP.com's What's Going There column and can be reached at dwillis@gannettnj.com. Please sign up for his weekly newsletter and join his What's Going There page on Facebook for updates.