The Fairway supermarket chain, which went public in 2013, filed for chapter 11 bankruptcy protection late on Monday in an effort to free up money to invest in technological upgrades and other changes.
Fairway, which operates seven stores in the New York metropolitan area and has locations in Connecticut and New Jersey, has faced intense competition from organic rivals Whole Foods and Trader Joe’s and from online home delivery services, the Wall Street Journal reported.
Following unsuccessful efforts to attract a buyer, Fairway has been working on a pre-negotiated turnaround plan for months, promising no changes to the collective bargaining agreements of its 3,400 unionized workers and no pain for its suppliers, the Journal added.
"We believe that implementing this prepackaged plan is the best opportunity for Fairway to restructure its balance sheet on an expedited basis ... while continuing to provide customers with the best food experience in the greater New York area," a statement from Fairway CEO Jack Murphy was quoted by USA Today.
The plan aims to cut about $140 million in debt, USA Today added, also stating that Fairway has secured $55 million in financing toward the reorganization.
As of Dec. 27, 2015, Fairway’s books showed assets of $346 million and liabilities around $397 million, according to the Journal.