Jack Murphy has left Fairway Market, where he served as chief executive of the “like no other market” merchant for the past 30 months. The Manhattan-based retailer earlier this month named Abel Porter as its new CEO.
Porter, who had been serving as a consultant for Fairway, which operates 15 supermarkets and four wine and spirits shops in the Metro New York area, has spent his entire career in the supermarket business, beginning with Smith’s Food and Drug in his native Salt Lake City, where he started as a stock boy and worked his way up to president and CEO. He retired from Smith’s in 1999, not long after the chain was acquired by Kroger. That same year, he began working with Foodland Supermarkets based in Honolulu and was that family-owned retailer’s president from 2001 to 2014.
At Fairway, whose history dates back to the Glickberg family in 1933, Porter will face the daunting task of rebuilding a company that eight months ago emerged from a pre-packaged bankruptcy and that in the three years prior to that Chapter 11 filing, as a publicly-traded company, never earned a profit. In fact, from the period from 2011 until May 2016, Fairway lost more than $300 million and amassed a debt load of $267 million
After failing to find a buyer in late 2015 and early 2016, Fairway filed for Chapter 11 protection last May.
The company’s majority new owner – GSO Capital Partners (a unit of large private equity firm Blackstone Group) – reduced its debt burden by $140 million, saving $8 million in annual interest payments
“We will emerge from bankruptcy with a stronger balance sheet, $50 million in cash and the backing and commitment from the senior lenders and new shareholders to reinvest in the future of Fairway,” Jack Murphy said at the time.
Murphy, who began his career at Purity Supreme in the Boston area and was previously CEO of Fletcher, NC-based Earth Fare, was hired by Sterling Investment Partners (which gained control of Fairway in 2007) in September 2014 to resuscitate a company that pledged to expand the Fairway brand throughout the Northeast with 90-100 unique perishables-driven locations when it launched its public offering in April 2013. While Murphy did instill more discipline into the Fairway organization, sales still haven’t rebounded sufficiently, especially for a company that is trying to regain its former status in an increasingly competitive market and with post-bankruptcy financial obligations to meet.
After opening a new store in the Georgetown section of Brooklyn in January, no other supermarkets are currently in its real estate pipeline. Additionally, the New York Post last month reported that Fairway was considering selling its perishables distribution center located in the Hunts Point section of the Bronx which opened in 2015. Fairway currently employs about 4,000 associates as its stores in New York, New Jersey and Connecticut.
