Fairway Market is not in peak season. The expansion of competitors such as Whole Foods and Trader Joe’s combined with an over-ambitious growth strategy have left the once-flourishing market looking rather wilted.
The market has deep roots in Manhattan: it began as a produce stand in 1933 and grew into a unique purveyor of gourmet and exotic foods. Yet with the growth of other specialty-food retailers such as Whole Foods and Trader Joe’s, Fairway’s “Market Like No Other” tagline is starting to ring hollow. Earlier this year, when Whole Foods opened its doors on the Upper East Side—just around the corner from a Fairway Market—The New York Times reports that Fairway said sales immediately slumped at that location.
Fairway has experienced plenty of financial troubles over the last few years. In 2007, it sold an 80 percent stake to Sterling Investment Partners, whose plans for the business included rapid growth in New York and expansion into New England and eastern states down to Washington, D.C.
Unfortunately, the Miracle-Gro strategy left Fairway with a lot of debt and not a lot of fruit: since going public in 2013, its stock has shriveled 86 percent and it carries a debt load of $250 million, The New York Times said.
Fairway execs are now pushing a more moderate growth strategy. Store openings will be fewer and further between, and primarily concentrated in New York City boroughs. Perhaps a little pruning will allow Fairway to flourish once again.
In light of these troubles, the company paid $3.5 million to terminate the lease they signed to be the anchor grocery store at 10 Hudson Yards (also known as the South Tower). Whole Foods Market which has been the anchor grocery store at the Time Warner Center in Columbus Circle, also a Related Companies development, will likely be the leading candidate to take over the lease.