Fairway Market prepares to file for bankruptcy protection this month after it could not find a buyer for its chain of 14 stores.
An almost 100-year old beloved grocery chain, Fairway has seen hard times in the last decade. When the Glickberg family sold a majority stake to private equity firm Sterling Investment, Sterling took an approach of aggressive expansion, intending to turn Fairway into a national chain. They opened locations in surrounding New Jersey and Long Island, and took the company public in 2013. This expansion produced a debt of $300 million and losses every quarter for the three years following the company’s IPO.
- Latest: Fairway Will Close SOME Stores
In May 2016, Fairway filed for Chapter 11 protection, and was bought by Blackstone’s investment sector, GSO Capital, who recently sold this stake to Brigade Capital Management and Goldman Sachs.
Fairway has closed its upstate location in Nanuet, New York, and sources claim that two of its Jersey locations in Paramus and Woodland Park are likely next.
Now Fairway is on the verge of seeking bankruptcy protection unless it can find a buyer. Fairway has more than $172 million in debt that matures in 2023 and 2024, and it cannot find buyers with debt this high while its struggling locations have yet to be sold off to bring this debt down.
>A source with knowledge of the bankruptcy has said that prices have increased: “It went from an everyday, low price model to a typical high-priced supermarket.”
Worse yet for Upper West Siders, Fairway’s flagship location on the Upper West Side could be at risk. Other companies like ShopRite have stated an interest in purchasing its section of building. “If they are selling their flagship store, which makes all the money, this could be a liquidation instead of a reorganization,” said a source close to the bankruptcy filings.
Competition from larger chains like Trader Joe’s and Whole Foods that have moved into Manhattan neighborhoods in recent decades have weakened Fairway’s overall market share and put substantial competitive pressure on the chain. But many New Yorkers are still loyal to Fairway for its competitive prices and quality produce and deli offerings, and would be sad to see it go.
