Village Super Markets prevailed in a modest bidding war for key assets of the bankrupt New York retailer Fairway Markets and will acquire five of its stores along with its distribution center, Fairway representatives said. Amazon, in the meantime, will acquire Fairway store leases in Paramus and Woodland Park, N.J., but will not operate those stores as going concerns—for now, anyway.
Seven Seas Georgetowne LLC—a retailer associated with the Key Food Stores Cooperative—also came away from the auction with Fairway’s Georgetowne Brooklyn store, which it intends to operate as a going concern.
The auction apparently found no takers for Fairway stores on Long Island, Connecticut or its Red Hook store in Brooklyn. It is presumed that stores not sold in the auction would close.
Springfield, N.J.-based Village, which operates a chain of ShopRite stores and last year acquired the three-store Manhattan specialty chain Gourmet Garage, emerged as an early bidder for some Fairway stores when the iconic New York retailer filed for Chapter 11 protection in January, but its $70 million bid for five stores was later exceeded by Food Bazaar operator Bogopa Service Corp, which offered $75 million. Village’s winning bid, for $76 million, now includes four Manhattan stores—Fairway’s Upper West Side flagship and its Upper East Side, Kips Bay and Chelsea locations, as well as Fairway’s Pelham Manor store in the Bronx, which it had not initially bid on but Bogopa had.
Village is also acquiring Fairway’s production and distribution center (DC) as well as the parking lot—but not the adjoining Fairway store—in New York’s Harlem neighborhood.
Bogopa was identified as the backup bidder for the sites Village is to acquire.
“These Fairway stores and DC employ over 1,500 people who have been doing heroic work responding to our local exigency during the ongoing crisis, clearly demonstrating the critical role our supermarkets play in communities all around the country,” said Scott Moses, managing director and head of PJ Solomon's food retail and restaurants investment banking team, which served as the merger-and-acquisition investment banking adviser to Fairway. “It is an honor to serve the Fairway team as they rise to the challenge and help sustain New York-area families during this difficult period.”
Amazon Retail had reportedly sought four locations but will come away with the leases of Fairway’s two New Jersey stores in Paramus and Woodland Park for a price of $1.5 million. Amazon in court papers said its intention was to close and remodel the units, which “will not operate or be open to the public on the premises for a period of time, to be determined.” The Seattle-based retailer will acquire equipment at the units as part of the deal, including refrigeration, walk-in coolers and cook hoods, the buying agreement says.
Amazon has been said to be looking at multiple sites for a new supermarket concept but has thus far identified only one planned to open, in Los Angeles.
Amazon was also identified as the backup bidder for the Georgetowne store that instead will go to Seven Seas, whose $5 million bid also includes inventory and cash. Seven Seas is identified as a Long Island City, N.Y.-based company. A company under a similar name operates Key Food’s Food Emporium store in Union Square.
The Georgetowne unit was a former Waldbaum's store that closed during parent A&P’s bankruptcy.