The parent company for popular New York-area grocery chain Fairway filed for bankruptcy Monday, but the chain said all stores will remain unaffected.
Fairway Group Holdings Corp. filed for “protection under Chapter 11 of the U.S. Bankruptcy Code,” according to a news release.
The company has struggled recently with the growth of stores like Whole Foods and Trader Joes, as well as “big box” retailers like Target, according to its quarterly filing from February.
“These businesses compete with us for customers, products and locations. In addition, some are expanding aggressively in marketing a range of natural and organic foods, prepared foods and quality specialty grocery items,” according to the filing. “Some of these potential competitors have more experience operating multiple store locations or have greater financial or marketing resources than we do and are able to devote greater resources to sourcing, promoting and selling their products.”
Despite the filing, all 15 stores, including 7 in the city, will remain open, according to Monday’s news release.
“We believe that implementing this [plan] is the best opportunity for Fairway to restructure its balance sheet on an expedited basis, strengthen its operations, retain jobs and create long-term value, while continuing to provide customers with the best food experience in the greater New York area,” CEO Jack Murphy said in a statement.
Peter Schaeffer, a partner at advisory firm GlassRatner, told Crains New York that the grocer would need a new management team as well as examine whether all their stores fit with their upscale image.
“Fairway can survive, but they need to do things differently, starting with making the stores easier to shop in,” Schaeffer told Crains. “They sell Cheerios in one part of the store and organic Cheerios in another, and the customer rejects that.”