As Queen so famously sang, another one bites the dust.
Retail's latest piece of roadkill today is Fairway Supermarkets, an institution for our readers living in New York City, and probably something the rest of our readers have never heard of.
In a move widely anticipated since the beginning part of the year, Fairway Group Holding Corp., operator of the Fairway Market supermarket chain, has filed for Chapter 11 bankruptcy protection.
The filing is what is known as a “prepackaged” bankruptcy restructuring, meaning that lenders agree to change existing debt to new equity and debt in the reorganized version of the firm. The involved lenders have agreed to vote in favor of the plan and make the exchange. Their loans will be traded for common equity and $84 million of debt of the reorganized company.
Along with the filing, Fairway is looking to get a $55 million super priority secured debtor-in-possession credit facility and a $30.6 million letter of credit facility to cover its outstanding letters of credit.
“We believe that implementing this Prepackaged Plan is the best opportunity for Fairway to restructure its balance sheet on an expedited basis, strengthen its operations, retain jobs and create long-term value, while continuing to provide customers with the best food experience in the greater New York area,” said CEO Jack Murphy.
Fairway's 15 locations will continue to operate throughout the process. The chain has struggled in recent years with expanded online competition and larger mass marketers that have expanded into food.