Fairway Markets, the iconic New York grocer that has long struggled to establish a wider footprint, is considering a second round under Chapter 11 bankruptcy protection, according to media reports.
The 14-store chain could file this month—a process that could result in a liquidation of all its assets—after failing to find a buyer, according to a report in New York Post.
Fairway had reportedly put itself on the selling block in September.
The company, established as a fruit stand on the Upper West Side in 1930, built a series of fresh and gourmet-focused specialty stores only to encounter heavy competition in both its home market and in new suburban locations established during a period of rapid expansion between 2007 and its first Chapter 11 filing in 2016. That event, sparked by heavy debt placed on the company from Sterling Investment Partners, which acquired Fairway from its founding family in 2007, turned over ownership of the company to former debt holders now led by Brigade Capital Management and Goldman Sachs.
Industry veteran Abel Porter has been Fairway’s CEO since 2017. Sources said Porter has stabilized same-store sales declines while improving service and offerings, but capital restraints and poor credit has limited the chain’s capabilities.
Moody’s Investors Service last summer said Fairway faced “elevated risk” of a debt restructuring or distressed exchange given the company’s “untenable capital structure” and eroding liquidity. The regional retailer, which has an estimated $700 million in annual sales, extended its loan maturities a little more than a year ago, but Moody’s said a further restructuring would be likely.
The Post report said competitors including ShopRite had expressed interest in acquiring its stores, including its Upper West Side flagship location.
Village Super Market, an independent ShopRite operator, last year acquired Gourmet Garage, another Manhattan specialty gourmet chain that had encountered competitive issues.