Fairway Market, a New York City metro area supermarket chain with 14 locations, has filed for Chapter 11 bankruptcy protection. The grocery retailer also has entered into a stalking horse asset purchase agreement to sell its distribution center and five Manhattan stores to Village Super Market, which operates stores under the ShopRite and Gourmet Garage banners, for $70 million.
Fairway will hold an auction process in bankruptcy to solicit higher and better offers for the distribution center and stores, as well as to look for buyers for the rest of its stores. Additionally, Fairway’s lenders agreed to provide the retailer with a loan of up to $25 million to keep its stores open during the process.
“We would like to extend gratitude to our employees, vendors, distributors and customers for their support, dedication and loyalty over the years,” said Abel Porter, CEO at Fairway Market in a statement. “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.”
Fairway had filed for chapter 11 bankruptcy protection in 2016 to reduce its debt load by approximately $140 million. The retailer has since modernized its operations by launching a self-checkout app and becoming one of the first supermarkets to carry the Impossible Burger.
However, Fairway continued to struggle with a heavy debt load and competition from other supermarkets, according to The Wall Street Journal. The company’s cash reserves had shrunk to $1 million by the time it filed for its latest bankruptcy.