Upscale metropolitan New York grocer Fairway Market reportedly plans to file for Chapter 11 bankruptcy for the second time in three-and-a-half years.
According to unnamed sources cited by the New York Post, Fairway is preparing to seek bankruptcy protection this month after unsuccessful efforts to land a buyer for its 14 stores.
One source told the Post that the move might end up becoming a liquidation instead of a reorganization, based on information that the supermarket chain’s flagship store on Broadway and West 74th Street in Manhattan is on the selling block and has been shown to competitors, such as ShopRite.
New York City-based Fairway couldn’t immediately be reached for comment.
In May 2016, parent company Fairway Group Holdings made a "prepackaged" Chapter 11 filing in which lenders agreed to exchange existing debt for new equity and debt in a reorganized company. The retailer emerged from Chapter 11 in June 2016. That came after Fairway couldn’t overcome heavy debt and high costs that persisted following an initial public offering in 2013, in which the company envisioned an aggressive expansion to potentially hundreds of stores.
Retail grocery veteran Abel Porter was named president and CEO of Fairway in early 2017, taking over from Jack Murphy, in a bid to turn the chain around. Though Porter brought some financial improvements, ongoing liquidity and capital constraints made it difficult for Fairway to compete.
The Post reported that Fairway, now owned by lead shareholders Brigade Capital Management and Goldman Sachs Group, is “quietly closing” stores. Most recently, the chain shut a 65,000-square-foot location in Nanuet, N.Y., in September, and stores in Paramus and Woodland Park, N.J., may be next in line for closure, sources told the Post. Fairway’s suburban locations, accounting for about half of its store base, have struggled the most, according to the Post.
Currently, Fairway operates eight stores in New York City (five in Manhattan, two in Brooklyn and one in Queens); two in Long Island, N.Y.; one in New York’s Westchester County; two in New Jersey; and one in Connecticut.
