
Fairway Was Mismanaged and Looted by Private Equity - joshwa
https://www.bloomberg.com/opinion/articles/2020-01-23/fairway-was-mismanaged-and-looted-by-private-equity
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seibelj
Who is the victim here? The owners cashed out to buyers who were presumably
the ones offering the best exit, the buyers funded the purchase with debt, and
their longterm plan failed. The banks who lent the debt took the risk and
believed in Sterling, which was a bad bet. It seems like everyone got what
they deserved.

What is the alternative? Legally forcing owners not to sell? Preventing owners
from trying to expand “too quickly”? Outlawing poor management? None of this
is feasible.

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thoughtstheseus
The real issue is the debt issuers. Why would you allow cash to leak out to
equity holders when the business is doing poorly? Too much leverage and
unrealistic growth expectations caused these issues.

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theandrewbailey
> In the ensuing buyout, Sterling put $150 million into the company in return
> for an 80% ownership stake. The majority of that was debt. Needless to say,
> the debt landed on Fairway's books, not Sterling's.

WTF?

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peter_d_sherman
Excerpt:

"On a per-square-foot basis, the four Fairways were among the highest grossing
grocery stores in the country."

Interesting!

