MANHATTAN — Just one day after fending off reports that Fairway Market would be closing all its stores, the company is filing for Chapter 11 bankruptcy.
Five of its 14 stores will be taken over by ShopRite’s parent company.
BREAKING — @FairwayMarket files for Chapter ELEVEN bankruptcy, a day after saying it won’t file for Chapter 7. Five of its 14 stores will be taken over by @ShopRiteStores parent company. https://t.co/kU4XCTSy7r
— James Ford (@jamesfordtv) January 23, 2020
"We would like to extend gratitude to our employees, vendors, distributors and customers for their support, dedication and loyalty over the years. It has always been Fairway’s priority to ensure our patrons are provided with the most optimal grocery experience, with the freshest foods and best quality products, and our employees feel appreciated. After careful consideration of all alternatives, we have concluded that a Court-supervised sale process is the best way to meet our objectives of preserving as many jobs as possible, maximizing value for our stakeholders, and positioning Fairway for long term success under new ownership," Abel Porter, Chief Executive Officer at Fairway Market, said in a statement.
On Wednesday, the company had denied reports and rumors that it was closing all its stores in its tri-state chain.
The parent company of the legendary supermarket insists that its keeping stores open, but it's not clear if that will last long term. The situation has the chain's legion of devoted customers worried.
The grocery store chain said in a statement: "Despite reports, Fairway Market has no intention to file for Chapter 7 or liquidate all of its stores. Such statements are categorically untrue and disappointing. Fairway has been engaged in a strategic process and expects to soon announce a value maximizing transaction that will provide for the ongoing operations of stores. Our lenders remain extremely supportive of our efforts. All 14 stores remain open for business, offering a complete range of high quality, specialty food products, and we look forward to seeing our customers and employees."
They noted that for most of its history, Fairway was a family business. However, in 2007, it was bought by Sterling Partners investment group. It eventually took the company public in 2013, with the intention of expanding into a national chain of 300 stores.
Instead, the company had to file for Chapter 11 bankruptcy in 2016.
That same year, Fairway was bought by GSO Capital, a division of the Blackstone hedge fund, which recently sold its stake to two other investment groups, Brigade Capital Management, and Goldman Sachs, which say the chain is open for business.