retail news in context, analysis with attitude

The New York Post reports that Fairway Market could default on its debt as soon as April, the result of being bloated with debt. The situation has caused Moody’s to downgrade "the grocer on further into junk territory — its second downgrade since September."

According to the story, "The 15-store supermarket chain has accrued $267 million in debt — and is struggling with declining sales. Revenue declined by 7 percent in the three months ended Dec. 27, to $191.6 million, from a year-earlier period ... Potential suitors have begun to circle the company, according to a source familiar with the situation, but some have been turned off by the high rent on a number of Fairway’s leases."

Fairway has conceded the problems, "saying that its competitors are 'more experienced at operating multiple store locations' and that it lacks the capital to invest in the kind of marketing it needs to get more customers in the door."
KC's View:
I think this thing is going to be sold to someone, and will end up being yet another example of how financial interests managed to kill off a once prosperous and productive retail company.