New Seasons Market, an upscale grocery chain based in Portland, said Tuesday it has sold its business to a South Korean company.

New Seasons will close one store in Seattle this month, scrap plans to open a second there, and convert a store on nearby Mercer Island to a different brand controlled by the new owners. The Portland stores will remain open but New Seasons said any future growth will be “modest.”

The Portland company’s new owner is Emart, a South Korean company that will control New Seasons through a U.S. affiliate called Good Food Holdings. Emart purchased Good Food last year for $275 million.

New Seasons didn’t disclose its sale price but said CEO Forrest Hoffmaster will continue running the business. The grocer said Hoffmaster was too busy Tuesday to discuss the sale.

Known for fine foods -- and correspondingly high prices -- New Seasons emerged in 1999 from another Portland grocery chain, Nature’s Fresh Northwest, following Nature’s sale to Wild Oats Market.

The chain has grown rapidly over the past 20 years and now employs 3,800 at 21 stores, 18 of them in the Portland area. The company has one store in the Bay Area in addition to the two in the Puget Sound region.

The Portland company also owns five California stores operating under the New Leaf Community Markets brand.

New Seasons itself is currently owned by Portland private equity firm Endeavour Capital and by the grocery’s founders, who have retained a minority stake. New Seasons said it expects its sale to Emart will close in January. Endeavour was also majority owner of Good Food Holdings before selling it to Emart.

“We believe this new ownership structure will allow us to even better support the long-term health of the business and deliver on our mission,” New Seasons’ Hoffmaster wrote in a note to employees obtained by The Oregonian/OregonLive. He wrote that the company had been seeking new owners who would allow the business to continue running independently.

“I think it’s a really good fit,” said Jennifer Nolfi, executive director of Portland State University’s Center for Retail Leadership. She said New Seasons will be joining similar grocery chains in Emart’s U.S. portfolio.

“They’re all regional grocers and they’re all focused on their region and the community,” Nolfi said. She said that local focus enables grocers to develop a deep understanding of their customer base and to cater to those shoppers in a way mass marketers cannot.

It’s not clear why Endeavour chose to sell New Seasons now, but Nolfi said every grocery is facing additional challenges from e-commerce -- challenges exacerbated by Amazon’s purchase of another upscale grocery chain, Whole Foods.

“Those pressures, in this Amazon economy, are having an impact on everyone in the retail space,” Nolfi said. She said the best response is innovation -- and a personal connection with customers.

As part of the deal, New Seasons’ Hoffmaster told employees, the sale agreement provides for New Seasons to continue giving 10% of after-tax profits to charities, to offer low-interest loans to small suppliers and to continue operating as a B Corp – which certifies that the company meets social and environmental standards.

Before selling to Emart, Hoffmaster said, New Seasons considered selling to other private equity firms, competitors and seeking to be owned by employees and the local community. He said employee ownership was too complex and would have required taking on too much debt.

Unlike Oregon’s biggest grocery chains -- Safeway, Albertsons and Fred Meyer -- New Seasons’ employees are not unionized. There have been periodic flare-ups in relations between New Seasons and some workers.

Portland Jobs for Justice, which has advocated for New Seasons workers in the past, said Tuesday the chain should have offered employees an opportunity to buy the company before selling to Emart.

Some New Seasons workers, who asked not to be named discussing their employer, said Tuesday they are cautiously optimistic about the sale. They said the grocers in Emart’s portfolio are well regarded and that Endeavour had been slow to invest in New Seasons’ operations. They said they hope the new owners will pay for deferred store upgrades and computers and other tools to manage the business.

Through Good Food, Emart owns Metropolitan Market in Seattle and Bristol Farms and Lazy Acres Natural Market in California. New Seasons’ remaining store in the Seattle area will join Emart’s existing Seattle stores by taking the Metropolitan Market name.

Hoffmaster told employees the Seattle store that will close, in the city’s Ballard neighborhood, is in a highly competitive market. He said New Seasons will not compete with other stores in Emart’s portfolio.

A favorite among affluent Portland shoppers, New Seasons has received a comparatively cool reception from some in the Seattle area. Activists have protested the company’s labor practices and have complained that the Central District store -- which now will not open -- would contribute to the neighborhood’s gentrification.

Emart, a giant South Korean discount retailer, has been steadily expanding into the U.S. market. Its $275 million purchase of Good Food last year brought it 24 stores in California and Washington, a deal that was roughly the same scale as the New Seasons purchase. At the time, Good Food had annual revenue of about $600 million.

-- Mike Rogoway | twitter: @rogoway | 503-294-7699