Fairway, American grocery chain founded in the 1930s, is facing danger of possible bankruptcy. The grocer which has around 15 stores in New York, Connecticut and New Jersey had plans to open more stores in the metropolitan area in the coming years. But the following the huge loss the company had in the last quarter of 2015, if unable to raise additional capital, it would have to file for bankruptcy. The last quarter ended December 27 recorded a heavy loss of $35.7 million for the American grocer which had lost around $300 million during the last five years.
In its latest filing with the U.S. Securities & Exchange Commission, Fairway Market stated that “Unless we are able to raise additional capital, our current limited cash resources and significant leverage will adversely affect our ability to open new stores.” During the last quarter of previous year, the supermarket was in compliance with financial covenants. But if the financial situation does not improve or an additional equity financing could not be made, then it would be difficult for the company to have a compliance by the end of the first quarter of 2016.
Fairway pointed out that the fierce competition in the market has lead to the company’s downfall. The food retail industry, particularly in New York City area, according to Fairway is really competitive. Loss of sales and reduction in margin has affected the company which was suffering from a upsurge in the operating costs.