Photography by Brian Goddard

The Valley’s real estate boom and bust has blessed and cursed one of Arizona’s greatest business legacies. Can the fabled Basha family rebuild again, and if so, who will lead the way?

Life for Eddie Basha Jr. these days is like a sugar-free muffin: sort of nourishing, sort of filling, but not nearly as sweet as it used to be.

In 2005, the family’s line of grocery stores surpassed 150 locations with four well-known brands: AJ’s Fine Foods, Food City, Sportsman’s Fine Wines & Spirits and, of course, Bashas’ Supermarkets. It was another boom cycle for Arizona real estate, and one of the state’s most fabled companies pledged to renovate 25 existing stores and open up to seven new locations each year.

“When we prosper, Arizona prospers,” Basha told a reporter at the time.

That year was soaked in triumph – enough to go around for Bashas’ and anyone else whose business was tied to growth. When Bashas’ briefly bumped another grocery chain out of the Valley’s No. 2 slot, company executives toasted with sparkling cider. Bashas’ finished the year with roughly $2 billion in sales and the No. 215 slot on Forbes’ list of the largest private companies in America.

It was a massive milestone for a home-grown company filled with milestones. Three generations of Bashas had guided an independent, family owned business through two destructive fires, near financial insolvency and the cutthroat grocery business to stand side-by-side with giants such as Fry’s, Wal-Mart and Safeway. And they did it with a style, grace and humility that an out-of-state corporation couldn’t pull off: giving away more than $100 million to local charities, offering highly niche grocery markets for Hispanics and American Indians, successfully championing education initiatives on the state ballot, getting a Basha this close to becoming governor and pranking some of the Valley’s most influential people along the way just for kicks.
Most of these accomplishments occurred under Eddie Basha II, who inherited the business in 1968 at the age of 31.

Now 72, Basha looks at his half-eaten, sugar-free muffin then looks away. He spent some of the boom period in a hospital bed recovering from congestive heart failure. He changed his diet, hit the treadmill – and the pounds just fell off (how many, he won’t say). He says he feels like he’s 50, and he has all the piss and vinegar of the younger, scrappier Basha who built the family empire.

The Chapter 11 bankruptcy proceedings this summer have left an upbeat Eddie Basha Jr. depressed and despondent. He worries about the family, the company and the community he has supported all these years. Heavy is the head that wears the crown.

Was Bashas’ too greedy? Too compassionate? If the truth is somewhere in between, it’s a tragic irony.

“Sometimes we gave away more than we made,” Basha says, talking over coffee on a recent Saturday morning outside AJ’s Fine Foods in Chandler. “But that was the commitment from my parents who immigrated here: ‘Build a better country. Build a better state. Build a better community, because that’s what life is all about.’”

“It’s not about greed and accumulation of wealth,” he continues. “That’s one of the internal issues confronting America – this consolidation of wealth and the widening chasm between have nots and haves. This is going to destroy our company.”

Four of Basha’s sons – Eddie III, Ike, Mike and David – are involved with the company at its highest levels. But when the dust settles from reorganization, Eddie Basha Jr. vows the public will see a leaner and meaner version of the hometown grocer. A new leader has been chosen, and he’ll have the weight of tradition on his shoulders.

By 1968, Eddie Basha Jr. had full control of Bashas’ Supermarkets. He was 31 years old.

Najeeb Basha and his wife, Najeeby, moved to Congress Junction, Arizona, in 1910 from New York after the family wholesale store burned down. The Lebanese-American couple soon moved to Ray, Arizona, but that store also burned down. When Najeeby hawked her tailored clothing to open a third store in Sonora and fire later gutted that building, the Bashas had had enough. They pulled up stakes and moved north to Chandler, opening a store on Boston Street.

The family – which included six daughters and two sons, Ike and Eddie – eventually built a home on North Washington Street nearby and surrounded it with fruit trees. Soon a teenage Eddie Basha began to strut his business stuff by filling wagons with fresh produce from the yard and peddling it door-to-door around Chandler. When Najeeb Basha lost his long battle with diabetes in 1932, Eddie and his brother Ike were ready.

They sought new markets for the family business. Every Sunday, they would fill the family car with dry goods, drive out to the nearby Pima and Yaqui Indian reservations and peddle shoes, combs and other merchandise. When they heard a new cotton-farming community was sprouting in south Chandler, they won the rights to operate the town’s new post office and general store.

It was 1932. For the first time, the storefront featured a “Bashas’” sign. While helping her sons run the store, Najeeby also helped the community. She gave away food to the needy and visited the sick. She stressed hadaam, a Lebanese term for compassion and love.

The business blossomed. Ike and Eddie Basha eventually opened a store on Main Street in Mesa in 1936, and by 1954 added the family’s first “supermarket” concept on nearby Robson Street. At 12,000 square feet, it was the largest store in the chain and kept Bashas’ in line with industry trends. A teenage Eddie Jr. was already indoctrinated into the family operation.
By 1968, the business belonged to him. Ike Basha had passed away. Eddie Sr. did, too, and Eddie Basha Jr. – then a Stanford University graduate with a degree in history – had full control of the company at age 31.

If Bashas’ was going to experience a Golden Age, the reign of Eddie II would be it. Over the next 40 years, Bashas’ grew to include more than 160 Arizona locations. The company opened American Indian markets, acquired AJ’s Fine Foods for the Valley’s upper crust and acquired Food City for its growing Hispanic population.

But the American Indian deal left an indelible mark. In 1980, tribal officials sent Eddie Basha a letter asking if he would be interested in opening a grocery store in Chinle, Arizona. After reading it, Eddie Basha reportedly called a meeting with his warehouse supervisor to see if it was feasible and, three hours later, called the tribe. “Hi, my name is Eddie Basha,” he told them. “I’m from Basha markets, and I want to be your grocer.”

Two days later, tribal officials came down to Phoenix and struck a deal with Bashas’. It included a 25 percent profit share with the tribe that would fund Navajo student scholarships and seed money for Navajo entrepreneurs. He also vowed never to sell alcohol on the reservation unless it was to another wholesaler, and that at least 95 percent of the store’s employees would speak Navajo.

These “Diné” markets – which means “the people” in Navajo – aren’t a typical grocery operation. Navajo residents are particular about their diets. The best-sellers are 25-pound bags of Blue Bird flour, Folgers coffee, Spam, mutton and sheep dip. Some of the locations even carry velvet, yarn and hay. At one grand opening, a Navajo medicine man blessed Eddie with corn pollen. It was intended to help make Eddie’s hair grow back as a gesture of thanks from the tribe.

Eddie’s bald pate is still waiting for that spell to take hold. But how many corporate grocery executives can say they’ve received the same treatment?

“We were invited to be on the Navajo Nation back in the ’80s, and it was basically a handshake agreement,” says Rob Johnson, Bashas’ in-house historian. “It came together very naturally and very easily. It wasn’t an example of a retailer being opportunistic and seeking to be on the reservation. We were actually asked to come.”

Peter MacDonald, the Navajo Nation’s tribal chairman at the time, remembers that invitation. The tribe’s membership was growing in the 1970s, and it wanted to stretch its business legs. Officials intended to build five major shopping centers on the reservation to encourage Navajo businesses to start up, MacDonald says, “but they needed an anchor. We tried a number of stores, and they all had their stories and reasons why they would not come in.” The tribe’s tax structure and sovereign rule scared outside companies off.

“Fortunately, we came upon Eddie Basha,” MacDonald says. “He took a look at our situation. I’m sure the numbers he got from his people did not look good in terms of being hugely profitable for a venture, but he took a chance on us.”

Soon after Bashas’ Diné markets debuted, other chains – movie theaters, clothing outlets and a Radio Shack – moved into the shopping centers. Tribal officials launched a “shop local” campaign to encourage members to frequent the Diné markets instead of driving to Flagstaff for groceries.

“We cannot thank Eddie Basha enough for his kindness and his humanity and his civil understanding that when people need help, if you go out there with them, they will take care of you,” MacDonald says.

As the Valley’s population skyrocketed, new communities attracted Bashas’ interest. After 2003, the company began plunking stores down faster and farther from central Phoenix as growth gobbled up the desert. Grocery chains flocked to the scene, and soon other chains joined the fray. Target and Wal-Mart stores that heretofore had only featured clothing, housewares and electronics suddenly started selling groceries.

Bashas’ did not have the buying power and pricing capabilities of these global corporations, so it tried to carve out niches with AJ’s and Food City. The company also experimented with new lines, such as AJ’s Petite and Ike’s Farmers’ Market. These would be a fraction of the size of a typical Bashas’ and offer locally grown, organic and high-end products. At that size, these stores could fit in the ground floor of all the urban, mixed-use developments that every Valley real estate agent was gushing about. As a test, Bashas’ opened a store below a loft development in Verrado in Buckeye.

At the time, Bashas’ president and chief operating officer Mike Proulx told a reporter, “The store isn’t doing nearly what it needs to right now, but we see it as an investment.”

Those investments aren’t looking so good these days. Earlier this year, Bashas’ announced it would shutter 29 stores across Arizona by October 10 and lay off hundreds of “members” – the family refuses to call them employees – from its workforce of 14,000-plus. Most of the closures are stores in outlying parts of Mesa, Chandler and Gilbert, near the same boom areas that have now gone bust.

“We chased growth,” says Eddie “Trey” Basha III, the company’s senior vice president of legal and financial affairs. “We got ahead of growth, and growth dropped off the map.”

Looking back, Eddie Basha Jr. says it was hard to say no to these locations. For each new store, Bashas’ hired a third-party service to analyze the latest growth data and forecast just how many customers Bashas’ could expect. Everything looked rosy. If only executives could have seen how many of those homes would be owned by investors and never inhabited by actual shoppers at all.

“That was one of the insidious statistics that people were unaware of, and it hit us smack in the face,” Basha laments. “It’s like my friend, [homebuilder] Ira Fulton. He was out there, he had all these lots sold, and everybody just gave them back. It was an eye-opener. We didn’t see it coming, nor the gravity of it, and I’m sorry we didn’t.”