Retail

New York’s Fairway Market Faces Bankruptcy

Any regular or even occasional visitor to New York City knows the Fairway Market. The quintessentially Manhattan grocery chain with its small shops dotting the city’s street corners are something of an institution.

For now anyway, it looks like the chain is in some financial hot water.

Yesterday, the company released the news that it is going to have to raise some serious cash by April to meet its debt obligations, a task complicated by the fact that their 15 metro area locations are hemorrhaging money at the moment. In the financial quarter that ended with December, the grocery business saw $35.7 million fall off its balance sheet — bringing the total loss over the last five years to about $300 million.

Fairway now runs the risk of being delisted from the NASDAQ, and as of a filing last week, revenue was down 7 percent year-over year to $191.6 million.

Fairway is counting on new stores to drive its growth, but conceded in the filing that “our current limited cash resources and significant leverage will adversely affect our ability to open new stores.”

The firm went public in 2013 after decades of being owned and managed by the Glickberg family. Former CEO Howard Glickberg remains on the board. The goal for the IPO was expansion led by Sterling Investment Partners.

That did not so much happen — and now Fairway has hired Weil, Gotshal & Manges – a law firm which is known for bankruptcy restructuring.

“The question is whether there is a turnaround in the future of this company,” David Tawil, president of Maglan Capital, told the New York Post. “There is not a big pool of potential buyers as we saw with the A&P bankruptcy.”

Fairway is far from the only old-school grocery suffering in a new-school digitally backed world where Google, Amazon and Instacart seem to be constantly stalking about. D’Agostino, another NYC family-owned grocery chain, has closed down some stores over the past year and is looking at even more in 2016, according to recent regulatory filings in NYC.

Among Fairway’s biggest competitors are Whole Foods, Trader Joe’s and Stop & Shop, as well as online retailers, the company said in the filing.

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