NEW YORK (AP) — Fairway priced its initial public offering of stock at $13 per share, above expectations, with shares of the New York grocery store chain set to begin trading Wednesday.
The company says it plans to use the money it raises from the offering to fund its expansion plans.
Fairway is well-known among New York shoppers for offering relatively low prices and cramming its shelves with a wide assortment of groceries. The company began as a fruit and vegetable stand in 1933 and has since expanded to a dozen locations in the region, including in Connecticut and New Jersey.
In a filing with the Securities and Exchange Commission, Fairway Group Holdings Corp. said its research shows there's room for more than 300 additional locations in the U.S. That would put it on par with organic grocer Whole Foods, which has 346 locations in North America and the United Kingdom.
But Fairway is looking to expand at a time when the supermarket industry is facing greater competition from big-box retailers, drugstores and even dollar stores. And Fairway notes that its competitors have greater marketing resources, along with more experience operating big chains.
The chain has been growing since Sterling Investment Partners bought an 80 percent stake in the company in 2007. The investment firm will continue to control the company after the IPO. Howard Glickberg, who is the grandson of the company's founder, remains on the board.
In the fiscal year ended April 1, 2012, Fairway had revenue of $554.9 million, up 14 percent from a year earlier. But it booked a loss of $36.7 million last year, and a loss of $39 million a year earlier, due to the cost of opening new stores.
Last fall, Superstorm Sandy also flooded and damaged its location in Red Hook, Brooklyn and the store was closed from late October to late February.
Fairway will trade under the ticker "FWM" on the Nasdaq. The company, which previously said it expected the stock to price at $10 to $12 per share, expects net proceeds of about $158.8 million.