Bogopa Service Corp., operator of New York’s multiethnic Food Bazaar superstores, has swooped in with a qualified overbid for a group of Fairway Market stores being auctioned as a part of Fairway’s Chapter 11 bankruptcy proceedings.
The $75 million offer for six Fairway store leases and their inventory, as well as its production and distribution center (PDC), has been designated as the “highest and best” offer for the assets of the storied New York brand, succeeding the initial “stalking horse” bid from ShopRite operator Village Super Markets.
The Food Bazaar offer is for all five of the Manhattan Fairway stores and the PDC that Village had bid for, plus one more—Fairway’s store in Pelham Manor, N.Y. The bid was revealed this week ahead of an auction of the ShopRite package on March 10. That auction has been rescheduled for March 16 with a new high bidder. Fairway is separately seeking offers for all 14 of Fairway’s stores, with a separate auction scheduled for March 26.
Food Bazaar’s offer is $5 million more than Village’s $70 million bid but has other key differences as well. ShopRite’s offer included a right to remove the PDC and Fairway’s stores in Manhattan’s Harlem and Chelsea neighborhoods in advance of the auction, while Bogopa’s offer does not. Instead, court papers indicate that Bogopa would have limited designation rights to assign leases of Fairway’s Kips Bay and Chelsea locations to qualified third parties before April 1.
It was not immediately clear whether Village, based in Springfield, N.J., would subsequently increase its offer, but a bidding war would be welcome for Fairway creditors.
Further details of the offer indicate that Bogopa is offering nothing for the lease of the Pelham store but $1.8 million for its inventory, prepaid expenses and cash. The jewel of the package is $29 million for Fairway’s flagship store on Broadway on Manhattan’s Upper West Side.
Should Bogopa be outbid in the auction, is it not obligated to proceed with the purchase of the Pelham location, court papers indicate. The offer includes employment offers to at least 85% of Fairway’s current union-represented workers at the acquired stores and 50% of its PDC workers.
Bogopa, based in Queens, N.Y. and founded by Korean-South Americans, is known for high-volume, fresh-focused stores aimed at New York’s multiethnic neighborhoods. It currently operates 26 Food Bazaar stores in New York, New Jersey and Connecticut, including a new unit that opened in the Bronx in February.
Fairway in a release said it has also received “competitive bids for various other stores” that are being evaluated.
“We would like to extend gratitude to our employees, vendors, distributors and customers for their continued support, dedication and loyalty during this process. Fairway’s store performance has generated significant interest in our stores. We look forward to a robust auction,” said Abel Porter, CEO of Fairway Market.
Fairway Group Holdings and its affiliated companies filed for Chapter 11 protection in January seeking to liquidate, having been unable to find a buyer for the company as a whole. Fairway had long battled high operating costs and debt service while sales declined amid competitive incursions.
Fairway Market’s legal counsel is Weil, Gotshal & Manges LLP. Its mergers and acquisitions investment banker is PJ Solomon and its financial adviser is Mackinac Partners. An Ad Hoc Group of senior lenders is represented by King & Spalding LLP.
The largest supermarket in New York’s Bronx borough opened Feb. 6 when Bogopa Service Corp. unveiled its latest Food Bazaar store at the Bronx Terminal Market.
The multi-ethnic superstore, the 26th in the growing empire of Brooklyn, N.Y.-based Bogopa, occupies an 80,000 square-foot space that formerly housed a Toys R Us in the urban power center that also includes a Target and a BJ’s Wholesale Club one level directly below. It’s located just a few blocks down River Avenue from another big Bronx destination: Yankee Stadium.
Food Bazaar pairs a deep selection of hard-to-find specialty items and culturally diverse fresh foods with a high-volume supermarket known for big packages and merchandising displays. The Bronx unit features a new design with bright lighted signs, prominent brand advertising and an as-yet unopened accompanying food court.
"Food Bazaar Supermarket at the Bronx Terminal Market represents an exciting new venture as our fifth location in the Bronx and the largest supermarket in the borough,” Spencer An, president of Bogopa, said in a statement. “In addition to a first-class shopping experience, the store will soon feature Boogie Down Food Hall, consisting of more than a dozen vendors that will showcase eclectic foods from the Bronx and the outer boroughs. The food hall will serve as a venue for people to gather and enjoy great food in a dynamic atmosphere. We are really excited to provide the community with this beautiful store and look forward to serving the surrounding neighborhoods for many more years to come.”
What follows are photos from WGB’s recent visit.
The store was made possible by New York’s FRESH Program, which brings healthy and affordable food options to communities by lowering the costs of owning, leasing, developing and renovating supermarket retail space, and the city’s New Markets Tax Credit program, which provides low-interest construction loans for projects in low-income communities.
The location in the Bronx Concourse is in reach of multiple New York City Housing Authority developments, making quality foods accessible to residents, the New York Economic Development Agency said.
The store has a dry-age case in the meat department.
“The opening of Food Bazaar in Bronx Terminal Market in Community District Four will provide access to fresh, quality foods and jobs for everyone in the district,” Community Board Four District Manager Paul Phillips said. “With 80,000 square feet, this is a game changer for the food landscape and a welcome addition to the neighborhood.”
Throughout the store, departments have lighted billboard-like signage highlighting food brands. One of three frozen aisles, for example, includes signage from the Caribbean and South American specialty frozen food brand La Fe. Other signs include the local favorite Marinos Italian Ice by frozen novelties, Kraft in packaged cheese, and the kombucha brand Heath-Ade above a display of refrigerated juices.
A double-wide “power aisle” features soaring displays and pallet drops of special deals and weekly specials, like 20-pound sacks of rice priced at two for $10 and Bustelo coffee bricks at four for $10. Kellogg’s Frosted Flakes in 61.9-ounce “giant” boxes priced at two for $10 may give its downstairs neighbors at BJ’s a run for big quantities at sharp prices.