FORMERLY PE OWNED
Fairway Market
Includes Fairway, Fairway Group
grocery · New York, NY
- PE Firm
- Sterling Investment Partners
- Year Acquired
- 2007
PE force-fed suburban expansion to an 85-year-old NYC grocery icon, IPO'd it, pocketed the cash, and watched it go bankrupt twice.
What Happened
- Sterling Investment Partners bought 80% of Fairway in 2007 for $150 million, mostly with debt — expansion borrowing grew into a $275 million loan by 2013
- Sterling had zero grocery experience but opened as many as three new stores a year, force-feeding growth that the thin-margin business couldn't sustain
- IPO'd in 2013 — Sterling pocketed more than half the proceeds and, between dividends, management fees, and stock sales, recouped all the cash it originally invested and then some
- Fairway never reported a single profitable quarter after going public; two bankruptcies followed (2016, 2020), and the chain dissolved down to just four surviving stores
The Damage Done
- An 85-year-old New York City grocery institution — beloved for its legendary produce, olive bar, and chaotic charm — was nearly destroyed by PE-fueled overexpansion
- The chain shrank from 15 stores to just four survivors, now operated by ShopRite's parent company Wakefern
- Thousands of New Yorkers lost their neighborhood Fairway, a store that felt like a community gathering place, not a corporate grocery chain
- Employees who'd built careers at Fairway — some for decades — lost their jobs as store after store closed across the metro area
Sources
- Why private equity keeps wrecking retail chains like Fairway — Slate(2020-01-25)
- How Private Equity Wrecked New York's Favorite Grocery — Yahoo Finance(2020-01-23)
- Fairway Market is on the brink of default three years after its IPO — Crain's New York Business(2016-02-19)
- Fairway Group Holdings Corp. Form S-1/A — U.S. Securities and Exchange Commission(2013-02-26)