(NEW YORK, NEW YORK)— After nearly 100 years of service, Fairway has filed for bankruptcy protections and announced plans to close multiple stores in New York, The New York Post reports.
The chain has been struggling in the past decade, first filing for bankruptcy in May 2016. While The New York Times waxed poeticat lengthabout Fairway’s struggle to find a niche among a host of competitors in the burgeoning luxury foods market, the more immediate cause is in the much more prosaic footnote to these speculations: the reckless greed of private equity.
In 2007, the Glickman family, who founded and managed the company for the previous 80 years, sold 80% ownership to Sterling Investment Partners. The firm shortly thereafter began an aggressive suburban expansion, hoping to expand the thriving brand into a lucrative national chain. In the process of their too-rapid expansion, they saddled the company with nearly $300 million in debt. After filing for bankruptcy in 2016, Sterling relinquished involvement and the company was bought out by Blackstone. It’s lead shareholders are currently Brigade Capital Management and Goldman Sachs Group, the Post explained.
Upper West Siders told the New York Times that the quality of the store has changed greatly in the past 10 years. UWS resident Eleanor Mason has observed a noticeable change since the sale. She told The New York Times,“The prices have gone up considerably, and the quality has gone down considerably.”
The deleterious effects of corporate greed have crippled and killed chains across the country such as A. & P., Winn-Dixie, Bi-Lo and Marsh Supermarkets. While Amazon’s monopsony goes unchallenged in the laissez-faire US climate where regulation is stigmatized as mere steps from a Soviet-style centralized economy, grocery stores struggle to compete against the competitive balance of luxury and affordability that Amazon-owned outposts like Whole Foods can offer.
Burt P. Flickinger III, a consultant, criticizedthe way that the store has been managed since its first bankruptcy declaration. He also pointed out that while it’s suburban branches struggle, some of it’s original New York branches remain strong competitors on the market, and should be saved.
Five key Fairway Locations in NYC, including the original UWS flagship, will maintain the Fairway name under different ownership by Village Super Market, which already owns Shoprite and Gourmet Garage.