Fairway's Brooklyn Stores Unscathed As Chain Emerges From Bankruptcy
Fairway has now emerged from its much-publicized bankruptcy following a rapid expansion, and its Brooklyn locations will emerge unscathed.
The grocer will only shutter one store, its Lake Grove, Long Island location, Crain’s reports. Last month, the chain announced its forthcoming store at a former Walbaum’s location would open as planned, and its Red Hook location is remaining open.
The arrangement will let the beleaguered supermarket chain leave bankruptcy and involves a change of ownership. Blackstone’s GSO Capital Partners will replace Sterling Investment Partners, which acquired the chain for $150M in 2007.
Sterling spearheaded a highly leveraged campaign to expand Fairway from a small local chain into a major regional one, but it didn’t exactly go well.
Fairway went public in 2013 and has not posted a profit for any quarter since. It also took on debt that grew to $280M. GSO Partners’ acquisition comes after failed attempts to sell the company to over 60 buyers.
Sterling’s coming out of the deal relatively well, all things considered. It’ll lose its stake, but has been able to gain back the cash it invested through the sale of shares in the company’s IPO, through dividends and management fees. [Crain’s]