Fairway Emerges from Chapter 11, Won't Close any NYC Stores

NEW YORK CITY, NY — Fairway stores in New York City have officially been saved from closing.

As of Tuesday, The supermarket chain has successfully pulled itself out of Chapter 11 bankruptcy, Crain's New York Business first reported. The supermarket has locations in Harlem, the Upper West Side, the Upper East Side, Chelsea, Kips Bay and Red Hook. Fairway is also opening a new location in Brooklyn, which is expected to be up and running by the end of the year.

Fairway announced plans to reorganize by borrowing money in exchange for equity, Crain's reported. The supermarket's debts should effectively be cut in half. During the reorganization ownership of Fairway will effectively change hands from Sterling Investment Partners to a consortium that includes Blackstone Group’s GSO Capital Partners. Fairway's annual interest payments are also expected to drop $8 million due to the restructuring.

"We will emerge from bankruptcy with a stronger balance sheet, $50 million in cash and the backing and commitment from the senior lenders and new shareholders to reinvest in the future of Fairway," Chief Executive Jack Murphy said in last month's announced of the reorganization plan.

Fairway filed for bankruptcy in May in an effort to perform damage control due to debts incurred by over-extending the business. Fairway began as a small produce stand on Manhattan's Upper West Side and has since grown to a 15-store network in New York, Connecticut and New Jersey.

But enough of the business mumbo-jumbo.

The good news is that the cheapest grocery store in the city — according to a Sept. 2014 study — isn't going under. Avoiding closuring isn't an easily accomplished feat for a supermarket in New York these days. A Gristedes on the Upper East Side recently went out of business and A&P — which owned Food Emporium — filed for bankruptcy in July 2015.

Here's a complete list of Fairway locations in New York:

• Harlem: 2328 12th Ave.
• Chelsea: 766 Avenue of the Americas
• Kips Bay: 550 2nd Ave.
• Upper West Side: 2131 Broadway
• Upper East Side: 240 E. 86th St.
• Red Hook: 480-500 Van Brunt St.

>>> Read the full Crain's New York Business story here.

[Photo courtesy of Jules Antonio via flickr]