The parent company of the struggling New York grocery chain Fairway Market filed for bankruptcy on Monday, just three years after taking the company public, after an ambitious expansion plan failed to generate enough sales to pay down the company’s debt.
The grocery store chain has been a destination for gourmands in New York for decades, but it has faced increasing pressure in recent years from fresh-food rivals, like Whole Foods Market and Trader Joe’s. A leveraged buyout of the chain by a private equity firm led to an aggressive store-opening plan that vacuumed up cash and sent the stock company’s stock price plummeting.
In its statement and court filings, Fairway emphasized that it would execute a Chapter 11 restructuring plan “without interruption” to its business. Landlords, trade creditors and employees will be unaffected, the company said. As part of the plan, Fairway’s senior lenders will exchange debt for common equity and $84 million of debt in the reorganized company.
Nathan Glickberg started Fairway in the 1930s as a fruit and vegetable stand on the Upper West Side under the name 74th Street Market. In 1954, the company expanded into meat, cheese and dairy products, and then gradually into a wider variety of specialties. The company now operates 15 in locations in the greater New York City area, including four wine and spirits stores.