Mega Foods closed yesterday. The financially troubled store at 665 H St. NE was the largest black-owned supermarket in the District and the first independent supermarket in Northeast in more than 20 years.

"We'll be back," promised co-owner Henry H. Edwards. But as he spoke, a representative from one of the store's creditors was outside his office waiting to inspect the Mega Foods assets.

Downstairs, customers, many of them elderly and regulars from the neighborhood, chose items from sparsely stocked shelves and said goodbye to employees.

Edwards and co-owner Arnold G. Montgomery said the store was undercapitalized from the day it opened, two years ago. Mega Foods is in leased space owned by a limited partnership, but the city's Office of Business and Economic Development provided an $800,000 loan for fixtures. The store's wholesale supplier provided the loan for inventory.

"We were undercapitalized in an underdeveloped market, but we proceeded," Montgomery said. "We were trying to make this dream a reality, but everything had to go right and everything didn't."

The qualifications of the two owners were never a question. Both men have extensive management experience, much of it in the food industry. Both have master's degrees in business administration. The men point to two things that chipped at the store's already shaky finances: the late occupation of two neighboring office buildings owned by the city and a picket by Local 400 of the United Food and Commercial Workers.

The union picketed until management agreed to allow store employees to organize a bargaining unit.

"The picket lasted from November to February, our busiest months," Montgomery said.

In March, the company filed for protection from creditors under bankruptcy laws.

The store needs $1.5 million to survive, according to David Patterson, a consultant to Mega Foods.

The store averaged 12,500 to 13,000 customers a week, but needed an additional 2,000 to break even. "If we had the money to advertise, we feel we could have gotten them," Montgomery said. "When we did advertise, we had our best weeks."

The store had been a part of the city's attempt to revitalize the H Street corridor. The Mega Foods owners have applied for new loans, but Montgomery said, "We had to go through nonconventional sources like {the Office of Business and Economic Development} and the Neighborhood Economic Development Corporation. The response is slow. A lot of times we would have been better off if we had gotten a 'no,' rather than no answer. At least then we would have known what direction to go in."