Tren Griffin+ Your Authors @trengriffin I work for Microsoft. Previously I was a partner at Eagle River, a private equity firm established by Craig McCaw. I am on the board of directors of Kymeta. Jan. 23, 2020 1 min read + Your Authors

A very tough business. "In November Moody’s estimated a lease-adjusted debt-to-EBITDA ratio of more than 15 times over the coming 12 months 'as top-line growth is expected to remain elusive due to the highly competitive pricing and business environment.'"  https://www.google.com/amp/s/www.winsightgrocerybusiness.com/amp/retailers/fairway-denies-chapter-7-report-says-deal-coming 

This from an old pre bankruptcy s-1 gives a sense of what Fairway Market margins are:  https://www.sec.gov/Archives/edgar/data/1555492/000110465913047295/a13-14345_110k.htm  Hard, hard, hard. Occupancy costs = wholesale transfer pricing.

"Fairway’s business has suffered to the point that it had less than $1 million in cash on hand when it filed for bankruptcy, court records show."  https://www.google.com/amp/s/nypost.com/2020/01/23/after-denying-liquidation-fairway-declares-chapter-11-bankruptcy-will-sell-stores/amp/  Cash is oxygen for any business.

Moody's: "You could see it when you looked at Fairway's liquidity. They just weren’t generating enough cash. No free cash flow, and lots of debt.”  https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/private-equity-wrecked-yorks-favorite-154230500.html 

$6M lease payments on the flagship store? A stone cold killer. Wholesale Transfer Pricing.


You can follow @trengriffin.



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