In January, Crain's published an article about Fairway Market's financial problems and observed that a share of the company's beaten-up stock cost less than a half-gallon of Fairway-brand organic milk. Eight months later, the share price has fallen further, to $2.16, so now you'd have to sell about two shares to pay for the milk. The embarrassing price-to-dairy ratio underscores the challenge facing CEO Jack Murphy, who was brought in last fall to turn things around at
the popular yet troubled retailer. He has installed new management, cut costs and reconfigured stores so merchandise is easier to find and reach. He's also planning to open a store in TriBeCa and a second in Brooklyn, replacing an old Waldbaum's.
"Fairway is now getting in a place where we are really able to compete," Mr. Murphy told analysts on a conference call in early August. "I expect that within the next 12 to 18 months, all of these initiatives are going to propel Fairway into positive territory on the top line."
Mind you, that seems like a long time to turn around a chain of just 15 stores. But Fairway, which has piled up about $300 million in net losses over the past five years, has deep problems that can be summed up in two words: Whole Foods. Sales at Fairway's Upper East Side location fell by 15% after a Whole Foods opened nearby in February. In Brooklyn, Fairway's Red Hook store suffered a similar kind of hurt after a Whole Foods opened in Gowanus in late 2013.
To read the rest of the story, please go to: Crain's New York Business
