“I’m sure seeing Fresh Market’s stock growth, and the fact that it’s one of the fastest growers on all the major stock exchanges, had to be a major motivator for Fairway and Sterling Investment Partners [Fairway's largest shareholder],” said supermarket consultant Burt Flickinger.
Last week, Fairway Market filed for a “confidential IPO,” which was first reported in the New York Post.
CEO Howard Glickberg confirmed the filing but said he has been advised not to comment on it. “Our lawyers are emphatic about us not talking about it,” he said. “Any comments we make could give the impression we are pushing the offering.” Mr. Glickberg’s grandfather co-founded the store nearly 80 years ago.
Fairway has been on an expansion tear since 2007 when Westport, Conn.-based private equity firm Sterling Investment Partners acquired a controlling interest in the family-owned business. The Glickberg family retains significant equity in the business, however and Mr. Glickberg’s son, Dan, is an executive vice president of the company.
The company operates 10 stores the (one in Harlem on 125th Street) New York, New Jersey and Connecticut area with another three on track to open by November, including one on Second Avenue and East 30th Street, Mr. Glickberg said.
Sterling Investment Partners had always hoped to turn its investment in to a public offering. The private equity firm’s managing partner, Charles Santos, told Crain’s in 2009 that he hoped to cash out within five years.
The timing is good, Mr. Flickinger says, because major supermarket chains are closing stores—A & P is in bankruptcy, for example—and selling their leases to discount clothing retailers and drugstore chains.
“America is more under-stored in food retailing than any time in its history…”
“America is more under-stored in food retailing than any time in its history,” the consultant said.
Fairway’s sales growth has also been strong. This year, analysts expect it to reach up to $750 million in revenues. Fresh Market, by contrast, has 115 stores in 20 states and is expected to reach $1.3 billion in sales.
“Fairway is doing about 60% of Fresh Market’s sales with just 13 stores,” Mr. Flickinger said. “The Fairway IPO could be one of the greatest food retail IPOs since Whole Foods went public 20 years ago.”
According to the grocer’s website, “The number of requests received for a Fairway Market in this town or that is truly staggering, and truth be told, the leaders at Fairway wish that they could fulfill every single one.”