Another business born and bred in New York City might soon be a thing of the past.
Unfortunately for New Yorkers, Fairway Market is reportedly near the brink of bankruptcy, according to Crain's New York.
The popular chain of supermarkets has been struggling to overcome mounds of debt due to vast over-expansion while simultaneously finding themselves unable to cope with competition from stores like Trader Joe's and Whole Foods.
This NYC based grocery chain is known to offer produce at exceptional values, competing with A&P and other grocery options in NYC.
Fairway Supermarket was one of the first NYC based supermarkets to bring in specialty and gourmet items for a relatively cheap price, attracting many New Yorkers to this much less expensive, more varied grocery selection.
Unfortunately, soon after Howard Glickberg (whose grandfather began the fruit stall that would become Fairway Markets) partnered with Sterling Investment Partners in 2006, the business problems began.
Sterling began aggressively growing the grocery store, becoming a publicly traded company, while opening stores throughout Manhattan, Brooklyn, Queens, and New Jersey.
Though Fairway's slogan is "like no other market," the newer stores seemed to be just the opposite, similar to every other supermarket in both appearances and business.
At the same time, Fairway's consumer base was being split between the added allure of Whole Foods and Trader Joe's, who began to stock gourmet and specialty items for similar prices.
Additionally, wholesaler, Costco, began selling similar products with lower prices, stealing some of Fairway's loyal customers.
According to Bloomberg Business, Fairway is "in many ways a victim of timing," as they couldn't keep up with other retailers who were offering promotions similar to Fairway.
With the onslaught of new competitors, the overzealous growth, and the new ownership, Fairways Supermarket is on the brink of defaulting on their debts, unless their lenders offer Fairway a reprieve.
Crain's expects that Fairway will be forced to restructure a chunk of their 15 stores, though they expect that the Upper West Side locations will most likely endure due to the fact that the properties are controlled and partially owned by Howard Glickberg, who remains on the board.
abhi__abhi Visit to my favorite grocery store
Though we're sorry to see a beloved piece of NYC disappear, we're also pretty ticked off that it seems as if the downfall is due to corporate greed.
Crain's reported that Sterling "pocketed more than half of the proceeds from 2013's IPO between dividend payments, management fees, management-termination fees and stock sales."
Essentially, Sterling has made back everything they initially invested in Fairway Markets, yet the business is till teetering on the edge of defaulting on their loans.
If you've got $16.5 million lying around, you can be the hero Fairway needs, though quite possibly the one they don't deserve right now.[via Crain's New York Business]