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Fairway Markets, the iconic New York City grocery chain, filed for bankruptcy protection with a proposal to sell its Manhattan stores to the Village Super Market Inc., a member of the Wakefern Food Corp. cooperative.
Village Super Market VLGEA, -0.74% , which operates stores under the ShopRite and Gourmet Garage banners, is offering $70 million for Fairway’s five New York supermarkets and its distribution center, Fairway Markets said on Thursday.
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Fairway has struggled to stay afloat under its heavy debt load and competition from other grocery stores at a time when bricks-and-mortar retail is being squeezed by online shopping. The company’s cash dwindled to $1 million by the time it filed for bankruptcy this morning, according to court papers.
Fairway’s lenders have agreed to provide a $25 million loan to keep stores running during the bankruptcy.
An expanded version of this report appears at WSJ.com.
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