This is Why No One Should Bail Out the “Smart Money” Stuck in Brick-and-Mortar Retailers: Let them Shed their Own Tears

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The toxic Safeway-Albertsons combo is waiting in the wings.

Late yesterday, Fairway Group Holdings, parent of Fairway Market – an “iconic New York food retailer,” as it calls itself,  that had started out as a “veggie stand” in 1933 and now lists 18 stores on its website – crumpled under a pile of debt and filed for a prepackaged Chapter 11 bankruptcy. Almost exactly three years after its IPO!

Bankruptcy rumors have been swirling for a while. The company announced in February that it would need to raise capital in order to keep its doors open. April 15, Bloomberg reported that the company was negotiating a debt restructuring with its creditors, and that a deal was near for a prepackaged Chapter 11 filing.

When the company did file yesterday, it stated that it wanted to “eliminate” $140 million senior secured debt. In return, these creditors would get common equity and $84 million of new debt of the reorganized company.

All of the currently outstanding shares will be cancelled. Screw those who’d bought them. They should have known better. That was the message.

It was no surprise, except perhaps for the penny-stock jockeys dabbling in its shares: today, FWM plunged 62%, from 21 cents a share to 8 cents a share. They’ll plunge 100% from here to zero.

As in so many cases when investors get wiped out, there’s a private-equity angle to it.

In 2007, private equity firm Sterling Investment Partners purchased an 80% stake in the privately held company, loaded it up with debt, stripped out assets, and pushed it into a big expansion drive to make it look pretty for an IPO down the road.

This was one of many retailers taken over by PE firms. Among the bigger ones:

Safeway and Albertsons, now under one PE hat, postponed its IPO, pending better market conditions; Neiman Marcus scrapped its IPO; Sports Authority just went bankrupt; Aeropostale is preparing for bankruptcy; Vestis Retail Group, owner of Eastern Mountain Sports, Bob’s Stores, and Sport Chalet just went bankrupt; Grocery chain A&P went bankrupt in July 2015, for the second time in five years; The Container Store IPOed in 2013 at $18 a share, first trade at $36, now at $6.60; J. Crew Group, 99 Cents Only Stores, Bon-Ton Stores, Claire Stores, and many more.

In April 2013, when Fairway had 12 stores, it was time for Sterling Investment Partners to exit. So they dumped the shares via an IPO into the laps of the unsuspecting public and conniving institutional investors with the usual Wall Street hoopla.

The IPO was a big success. It priced at $13 a share. Trading opened at $18.07 a share. In July 2013, shares almost touched $29, up 123% from the IPO price. Then reality set in: the company lost money in every quarter.

And it didn’t take long for reality to become a legal issue. Starting on March 19, 2014, the company was hit by a slew of shareholder class action lawsuits that alleged that it had made false statements about its financial condition before and after its IPO. Law360 at the time:

In its registration statement issued in connection with its April IPO, Fairway projected “solidly positive same-store growth” and 25% growth over all for the third quarter of 2014, but at the time, the company was experiencing decreased same-store sales, increased direct store expenses, and sluggish growth, according to the shareholders’ lawsuit.

The suit claims Fairway’s issuance of falsities continued after the IPO, in the form of regular statements reiterating prior announcements’ rosy financial outlook.

If this “rosy financial outlook” sounds familiar, it’s because that’s how IPOs and other stocks are being promoted on Wall Street.

The investors said the truth came to light on Feb. 6, when Fairway reported earnings well below analysts’ estimates, with only 3.2% third-quarter growth, a far cry from management’s prediction, and announced the resignation of its CEO.

According to the complaint, the day after the February 6 announcement, FWM plunged over 27%. Those who’d sold after the plunge were among the lucky ones. It was still trading around $8 a share for a while, before giving up its ghost.

For equity investors, this must be one of the most toxic combinations: retailers that were bought by PE firms that then strip out assets, pile on debt, and then try to get out by selling shares to the unsuspecting public and conniving institutional investors.

The biggest such deal will be the Safeway-Albertsons combo, now waiting in the wings.

In an S-1 filing in July last year, ahead of the now scrapped IPO last October, Albertsons disclosed that for the fiscal year 2014, ended February 28, 2015, it had a net loss of $1.23 billion and was buckling under $12.8 billion in total debt, up from $3.7 billion in 2013 before the acquisition of Safeway.

Will future stockholders have any say? No. The S-1:

Our Sponsors will indirectly control us through their respective ownership of Albertsons Investor and Kimco and will continue to be able to control the election of our directors, determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions.

These “sponsors” include PE firms Cerberus, real-estate investors Klaff Realty and Lubert-Adler, REIT Kimco Realty, and shopping center owner Schottenstein Stores.

Brick-and-mortar retailers are in a very tough business. They’re besieged by online competition and other desperate brick-and-mortar retailers. They have big expenses. And they face strung-out American consumers. Throw a lot of debt into the mix, and it can turn toxic in a minute. It’s far better to let the PE firms stew in their own juices than bail them out of these deals.

And there’s no respite in sight for the plight of brick-and-mortar retailers. Read…  Retailer Bankruptcies Are Hailing Down on the US Economy

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  74 comments for “This is Why No One Should Bail Out the “Smart Money” Stuck in Brick-and-Mortar Retailers: Let them Shed their Own Tears

  1. gary
    May 3, 2016 at 7:12 pm

    “Brick-and-mortar retailers are in a very tough business. They’re besieged by online competition and other desperate brick-and-mortar retailers.”

    Sorry but I am skeptical about the above quote. Does anybody buy groceries online? I’m pretty sure that people still get their milk and eggs from a brick-and-mortar store, and always will (unless Amazon can use a gyro-copter to get you a block of cheese in 15 minutes.)

    • Bigfoot
      May 3, 2016 at 8:07 pm

      The brick & mortar quote you are worried about came at the end of the article & has been an ongoing reality for several years at least. Wolf mentioned several other stores unrelated to groceries ahead of this statement.

      I get my free range fresh eggs from a local grower. I would raise my own chickens but the current method is cheaper & a win win for local community. There are some fantastic farmers markets in a reasonable commute distance. I wish more people would support their local community growers. Support your local economy.

      There are places that offer online grocery shopping & include delivery. I have never used one & hopefully never will. We can only hope that there will always be a brick & mortar grocery store & that is fully stocked & functioning.

      • Oneyedjack
        May 4, 2016 at 7:13 pm

        “get my free range fresh eggs from a local grower”They do taste better.If anyone has the opportunity. Nugget Market hands down is such a pleasure to shop in.Its such a rarity to have 100% quality and pride in a business.Nugget pulls it off with ease!I have to say Safeway/Savemart vegies are horrible.My guess is they buy them already old from their venders.Costco vegies try to avoid.So mostly shop farmers market for fresh.Agree to support local,now more than ever when so many businesses hurting.

    • May 3, 2016 at 8:15 pm

      In terms of grocery stores? It’s tougher, but there’s quite a bit of online activity. Google and Costco have a deal at least in SF with home delivery. Amazon has food delivery service. I get tons of ads (on paper in the mail!) by “food tech” startups that want to deliver all kinds of food and drinks to my home….

      But the quote is about brick-and-mortar retailers in general. They’re being eaten alive by online retailers. The title is about retailers in general, though the article uses specific examples … Albertsons, the biggest PE-owned retailer, happens to be a grocery store. A number of other examples in the article were clothing stores, etc.

      • d
        May 4, 2016 at 5:29 am

        How is this asset-stripping, entry bonuses , dividends and further bonuses all funded by debt.

        Followed by IPO and PE exit, not fraud, and why is it not acted upon in the US in particular.

        I Don’t see how America can continue to allow this, and I can not comprehend how the “American Investor” continues to line up for it.

        Clearly no fiduciary responsibility or culpability for investment advisers in the US, is a contributing factor to this fraud.

        • May 4, 2016 at 11:15 am

          America can continue as long as ‘investors’ wink at disclosures in S-1 filings … or don’t bother to read the filings at all.

          Buying pressure is there as long as primary interest rates and yields are near/below zero percent.

          Any investor that has been awake over the past thirty or so years would know that grocery stores offer microscopic rates of return. Any grocery chain promising a profit of more than a percent or two has to be lying.

        • interesting
          May 4, 2016 at 12:35 pm

          “not fraud”

          i was thinking the exact same thing!!!

      • roddy
        May 4, 2016 at 9:02 am

        Stop & Shop-the Boston based chain that is the largest supermarket in the East besides Walmart, has had the Peapod delivery service for a few years now.

      • alexaisback
        May 4, 2016 at 11:32 am

        you missed the great A & P

        A&P’s bankruptcy

        The Great Atlantic & Pacific Tea Company, better known as A&P, was an American and Canadian chain of grocery stores that ceased supermarket operations in 2015 after 156 years in business

        • May 4, 2016 at 1:03 pm

          Sure did. I focused on more recent PE-backed bankruptcies, and this happened in July 2015. But it should have made the list.


        • May 4, 2016 at 3:53 pm

          I now updated the list with A&P. Thanks.

    • Larry Dallas
      May 3, 2016 at 10:17 pm

      Walmart has entered the grocery business in a lot of key markets.

      • Jungle Jim
        May 4, 2016 at 8:35 am

        Larry Dallas, that is true, but at least here in west central Florida they aren’t doing a particularly good job of it. Their prices are not always lower, and the produce is not that great. I suspect that a lot of their grocery sales are to people that stopped in for something else and just didn’t want to make a separate trip to Publix.

    • Mark
      May 4, 2016 at 5:18 am

      Hope we don’t lose our local Safeway-then all we will have is Krogers-pure crap from Ohio…..i know that grocery stores operate at a 2% margin-it must be tough-I see our SW with more and more empty space and often out of stock. Their quality of baked goods, Deli and hot food is what QFC (now Krogers) USED to be-not quite Gourmet, but far above the mass produced “store food” of Krogers

    • May 4, 2016 at 9:11 am

      Actually, we and many others are buying a substantial amount of our grocery needs online and saving a lot of money and time in the bargain. Just one example is ‘World’s Best Cat Litter’ which we buy online for $4 less per bag (and yes, UPS shipping to our door is free). We buy other staples in case lots too for a ton less than can be had at Wal-Mart or any other brick & Mortar retailer. We only go to B&Ms for perishable items.

    • Greg
      May 4, 2016 at 10:44 am

      I buy my milk, eggs, produce and meat from an organic producer in Colorado that brings these products to my door in Cheyenne, Wyoming. Their quality is better than any of the local grocery stores and their prices are quite reasonable.

  2. economicminor
    May 3, 2016 at 7:20 pm

    I know this is all legal but how is it good for the US? It may be good for those who chose to do these PE takeovers, adding additional debt and then selling out in IPOs but why does the US allow it? More debt means less competitive when the debt isn’t used to add productivity. Why would anyone in their right mind buy one of these IPOs? Other than making a few a bunch of money, it does absolutely nothing productive and does a lot of harm both to the employees and the nation in general. What a total waste.. I guess in a nation that worships money, anyway you get it is fine.

    • Mary
      May 4, 2016 at 10:01 am

      I know this blog is narrow focused on investor issues. (And does an excellent job conveying information and explaining those issues.)

      But I read today’s blog and am scared silly by the social ramifications of the economic changes it’s documenting. What happens when PE firms buy, plunder and dump all those sources of the goods and services we depend on? Will we be left to buy groceries sight unseen from say Amazon? Can you imagine the lousy quality? Or be dependent one of those pricey dinner in a box services? Who has the money, not to mention the tech skills to live that way?

      I started thinking about all this when I read an article about PE firms buying up medical practices. Suppose someone makes my wonderful GP an offer she can’t refuse? She’ll retire, her staff will be laid off, and her patients?????

      • West
        May 4, 2016 at 10:39 am

        Sounds like you should be happy that PE firms are buying up the national chains.

        The corollary to this is that with the end of the national retailers (largely supplanted by online vendors), a local infrastructure will be recreated. Right now we see this in farmers’ markets and local grocery stores, and local businesses are competing very nicely with online competition. It’s only the national chains that are getting killed, as they milked the golden goose too long and delayed investments that would have made them competitive in this area.

  3. polecat
    May 3, 2016 at 7:21 pm

    well….as of last week, the Haggen store in our little town closed for good…….leaving Deathwa……opps….I mean Safeway, to compete with the local co-op organic grocery…..and that other bastion of free enterprise….Wallmart !!

    one…less…consumer choice…what’s not to like??

    PE players……may they all rot in hell !!!

    • May 4, 2016 at 9:48 am

      All of the Haggen stores in San Diego closed, dying a well deserved death. A twelve-store chain buys out 85 stores and thinks it can manage them? what a joke. The stores in San Diego were farcial; erratic but generally high prices, crappy quality, and so focused on “gluten free” that they failed to stock anything else.

      • TheDona
        May 4, 2016 at 10:41 am

        Bill H: The Comvest Group bought out the majority of the Haggen’s family’s interest and MGP X properties bought all of the Real Estate. Ironically Albertsons is buying back the stores they sold to them in the first place.

        More of the rape and pillage theme. Business Gengis Khan style!

  4. Petunia
    May 3, 2016 at 7:45 pm

    Most of the stores you mention that are going bust sell a lot of junk, are overpriced, or are no longer viable in this economy. People have no money and time for sports equipment or activities. Athletic clothing is among the most overpriced junk sold. And stores that sell nice tee shirts, for over $40, have no path to profitability in this economy. The quality of food in supermarkets hit a wall with the financial crisis and has steadily declined. These are only part of the reasons retailers are going bust.

    • Phil m
      May 3, 2016 at 10:59 pm

      How can people have no time for activities in this ” gig” economy. What is the average work week, something like 30 hours a week. Maybe if people took some time for athletic activity we wouldn’t be staring at the massive healthcare crisis in our future. Sedentary, obese and a ticking time bomb on health issues is how I see an overwhelmng% of our population. Some activity sure wouldn’t hurt,

      • roddy6667
        May 4, 2016 at 9:04 am

        Don’t confuse spectator sports with exercise. Branded “sportswear” is a total non-necessity.

      • Petunia
        May 4, 2016 at 9:26 am

        People in the gig economy use their free time to find the next gig.
        They don’t have the time or extra money to play golf or to run around town correctly attired and equipped. If you are currently doing well you are not the average person anymore. Please get a clue.

        • polecat
          May 4, 2016 at 10:40 am

          Yeah……’if your doing well”……… you haven’t been ‘gigged’ !!


    • VegasBob
      May 4, 2016 at 1:14 am

      I got corralled into going to the Tuscon Mall last week and wound up at an upscale recreation and sporting goods retailer. I never saw so much overpriced stuff in all my life. That outfit could cut prices 75% and still turn a huge profit.

      Here in the country, south of Tucson, the 2 Slaveway grocery stores always seem to be jam-packed during the day, but most of us senior citizens don’t venture out after dark. Business around here is slowing down for the summer since most of the snowbirds have headed back north.

      I don’t regularly shop at Slaveway because their prices are way too high. All of that interest paid on borrowed billion$ gets taken out of the hides of those hapless customers who aren’t as price conscious as I am.

  5. Chicken
    May 3, 2016 at 9:21 pm

    I don’t get the PE game, I guess they don’t care as long as they take home obscene amounts of someone else’s money.

    I’m pretty sure investors have caught onto their game, I read where one firm was giving away booze to make their sales look good for an easy sale of the company, I doubt they pull it off, hopefully no one buys the company but thanks for the free booze anyway.

    These are the scumbags that receive taxpayer bailout rates on the backs of Americans who worked their entire careers and saved now that’s being dwindled away so scumbags can play these false games.

    • MC
      May 4, 2016 at 5:09 am

      Well, I am glad I am not the only one.
      PE buyouts have long devolved into a predictable pattern: leveraged buyout, with new debt dumped on the newly acquired company, creating havoc in the product/service line by hiking prices, dismantling networks, scaring customers away etc or just old fashioned asset strip mining, IPO attempt, which may or may not be successful, and finally Chapter 11.
      The only ones partying are vulture funds, and only if the IPO is successful and only in the last two/three quarters before the firm seeks bankruptcy protection.

      Traditional M&A I can understand: you either “buy” growth (IBM, I am looking your way) or buy a company to have access to its patents, R&D etc.
      But these PE buyouts make very little economic sense. They are the financial equivalent of illegal logging operations: you may get short term profits but then you are saddled with nothing more than a wasteland.
      You need to move on to the next stretch of pristine forest but soon either trees will run out or you’ll run into an angry mob.

      • Merlin
        May 4, 2016 at 7:10 am

        Don’t forget the employees who built these companies are the most unfairly treated when the inevitable layoffs begin.

  6. wholy1
    May 3, 2016 at 10:21 pm

    Break the [corp] chain[s] operations. Get rural, shop/support local vendors. Banksters, Hedgers, Investors, Traders, Speculators, Lawyers, Realtors, Legis-traitors, Magis-traitors, gov agents/thugs, foundation subsidized academics and other parasites suck from the private productive element.

  7. Helmut
    May 3, 2016 at 10:58 pm

    So, Amazon with a P/E ratio of about 500 is a better business model to invest in ?

    • May 3, 2016 at 11:42 pm

      At least it has a P/E ratio… though the price may be wrong

      • Sluggo
        May 4, 2016 at 6:27 am

        Man, if grocery stores and fast food restaurants start to deliver, I may never leave my house again! Wooooooo weeeeeeee!

        • d
          May 4, 2016 at 12:18 pm

          You live in an area where they dont do this??

          How strange.

          My first after school job was delivering grocery’s, to phone orders, before the PC was even an everyday concept, let alone reality.

      • walter map
        May 4, 2016 at 9:36 am

        Confusion about the price is intended to distract you from how they’re fudging the earnings.

        I think my cynicism gland just ruptured.

  8. frederick
    May 3, 2016 at 11:00 pm

    İs anyone else having trouble getting the story on Yahoo to open?

    • MC
      May 4, 2016 at 4:55 am

      No problem with any of the links here.

  9. Lars
    May 4, 2016 at 12:56 am

    Another superb telling-it-like-it-is article, Mr. Richter !!!
    Bravo !!!
    This article is exactly why we all love and admire you so much !!!
    Best, Lars

    • May 4, 2016 at 8:37 am

      You just made my day!!

    • TheBloomIsOffTheRose
      May 4, 2016 at 10:10 pm

      I second that assessment.

      This article and so many others are why we love and admire you so much.

      Thank you.

  10. Darryl
    May 4, 2016 at 3:27 am

    This exact scenario has just played out down under, Dick Smith Electronics, an iconic Australian retailer was bought by one of these nice P E firms, stripped of assets then loaded with debt. As of last month, now bankrupt owing millions and investors fleeced. When are we going to learn when we see one of these vulture -oops venture capital firms offering amazing opportunities?

  11. TheDona
    May 4, 2016 at 7:52 am

    Fresh Market to close stores in Kanas, Iowa, Missouri, and Texas. The Fresh Market opened its first store in 1982 and this past March announced it was being acquired by Apollo Global Management. And…no one is noticing this trend of private equity fund = kiss of death?

    Read more here:

    • May 4, 2016 at 8:09 am

      TheDona, thanks for the info.

    • Petunia
      May 4, 2016 at 8:18 am

      I just discovered Fresh Market and it is a great high end market in my area. They are expensive but they have a great bakery, butcher, and prepared foods counter. They absolutely need to advertise their products and services. I would hate to see them go because outside of NYC and Wedgeman’s in PA, they are the best market I have shopped in in the last 15 years.

    • David in Texas
      May 4, 2016 at 8:44 am

      The Fresh Market in Fort Worth has been open less than a year. It’s a nice store. Unfortunately, the private equity asset strippers have decided to close all 8 Texas stores, most of which have been open only a short time.

      May 4, 2016 at 11:49 am

      The masses won’t pay for “real” food which is not cheap. They want CHEAP “food”.

      In the last few years many books have been written about the awful crap we consume. “Salt, Sugar, Fat”, “The End of Food”, “The Betrayal of Food”, etc.

      • d
        May 4, 2016 at 1:43 pm

        ” The masses won’t pay for “real” food which is not cheap. They want CHEAP “food”. ”

        THEY DONT WANT CHEAP CRAP marketed as food

        They want something to stop their stomachs hurting.

        As they can not afford what is good to eat. As they do not get paid enough to be able to buy it, and pay TAX.

        The main reason healthy good food is expensive, its that the volume has been stolen by corporates dumping crap, to destroy Natural Farmers market share

        Aided by the retail corporate owned chains who make more easily marketing packaged crap, than they do fresh healthy food.

        Average retail markups on fresh vegetables and fruit are over 500 %.

        I can buy 20 KG fresh Organic carrots from the grocer for $ 20.00. I can buy them at the farm gate for $10.00. The farmer gets less than than $ 10.00 when he sells them in bulk at the wholesale vegetable markets.

        I can buy the same 20 KG carrots from the Corporate retail chain store for $ 80.00.

        Friend of mine owns/runs a bull farm. He gets $ 2.00 per KG on the hoof for PREMIUM organic free range Beef. And he has to pay to send them to the meat possessors. The average retail price is over $ 19.00 Per KG.

        Good food isnt expensive, corporates, with captive urban slave populations, make it expensive.

        So they can sell easy to handle packaged imported Chinese crap Noodles and GMO tinned vegtable products, grown in poisonous environments. By making good food expensive.

      • Petunia
        May 4, 2016 at 1:44 pm

        I grew up working class and ate good quality real food everyday. Now according to statistics we are middle class and can’t afford what was average years ago. We eat a lot of pasta and chicken because it is cheap and we can’t afford quality all the time. We have to watch what we spend and use a list. We cannot buy everything we want, even in a supermarket. Please be more considerate of the “masses”, we are struggling to survive.

        • TheDona
          May 4, 2016 at 2:01 pm

          Petunia: I am thinking of cheap food as packaged with “tastes like” real meat on the front, anything from a box, box potatoes, frozen potatoes, frozen pizza, frozen nuggets, canned fruit…junk like that. Mainly inside aisle things. Not to mention all of the chip, cracker, cookie items people buy. Soda consumption, thank goodness, is heading south big time.

          A chicken, pasta, add some veggies…that is real food.

        • d
          May 5, 2016 at 12:44 am

          Wher was the pasta made and what GMO/chemicals are in it?

          Where and how was the chicken raised and does the producer use growth hormones Antibiotics in the life cycle?

      • TheDona
        May 4, 2016 at 1:47 pm

        Centurion: It is the impoverished and the uneducated who need/want the cheap food. There is a revolution out there with a majority wanting cleaner foods, honest labeling, more fresh options etc. Hence the organic push and lots of the big food corps changing recipes to have less junk in them. Kraft mac n cheese even changed it’s recipe for heavens sake. The bigs corps are buying up smaller organic and nutritious individually owned brands. They are all scrambling to stay relevant. Voting with our pocket book IS paying off.

  12. TheDona
    May 4, 2016 at 8:53 am

    Regarding Fairway: Its new owner didn’t know how to manage the business. Back in 2007, Fairway’s founding Glickberg family sold the business to private equity firm Sterling Investment Partners for $150 million. After the transaction, the new owners had Fairway borrow heavily to fund expansion. Yet Sterling had no experience in supermarkets, where profits at even the best-run companies are measured in pennies on the dollar. Howard Glickberg, the last of the founding family to work at Fairway, left in 2014 and there was lots of management turnover. Sterling made out just fine. It pocketed more than half the proceeds from 2013’s IPO and between dividend payments, management fees, management-termination fees and stock sales, Sterling has recouped all the cash it used to buy Fairway and then some.

    Why is this not a criminal act?

    • Chicken
      May 4, 2016 at 9:15 am

      I think you answered your own question, debt is santioned by the Federal Reserve, on behalf of special interest groups.

      Effective ploy for vacuuming up “dumb” money from every nook and cranny.

      Ask Mitt Romney’s dancing horses.

    • walter map
      May 4, 2016 at 9:23 am

      “Why is this not a criminal act?”

      Because the regulators hope to get in on it when their appointments expire.

      I sometimes wonder how much corruption a system can tolerate before it seizes up, bursts into flame, or explodes. We haven’t reached that point yet but we’re bound to find out eventually.

      Did you know that members of the U.S. congress are exempt from insider trading laws.?

      • TheDona
        May 4, 2016 at 9:48 am

        Thanks Walter. I just looked that up. Their Staffers are exempt too.

        May 4, 2016 at 10:21 am

        They are exempt from just about ALL laws. The laws about discrimination is hiring do not apply. That is why ol’ drunk Ted Kennedy could hire only nice young White things and why the Black Congressional Congress can refuse to hire any White they don’t like.

        The American public are morons and deserve what is coming.

    May 4, 2016 at 8:59 am

    Brick & Mortar, and enclosed Malls, are dying because women shoppers (the ones that drive shopping) are getting scared to enter these places or park in the huge parking lots. Especially at night. My wife refuses to shop after the sun goes down.

    Changes in America, since 1965, have caused too much worry and fear among the primary shopping Demographics.

    My wife, my daughter, and all their friends shop on line since they are so uneasy going “to the mall”. They see groups of guys staring at them, making vulgar comments, following them……even though both my wife and daughter carry handguns. This is America, you know.

    They also are so tired of trying to find someone in Target, or K-Mart, etc who can understand them. I once walked out of a Target since I could not find a single employee that spoke clearly. After asking “where would I find jumper-cables”, I walked out and went to nice, “all boys”, “redneck” auto parts store.

    • walter map
      May 4, 2016 at 12:22 pm

      “My wife refuses to shop after the sun goes down.”

      You’re just annoyed because Mall Security confiscated your howitzer.

  14. walter map
    May 4, 2016 at 9:09 am

    What we cynics need is an Investor Devil’s Dictionary, complete with a corrected index of acronyms.

    PE, pirate equity
    VC, vulture capital
    LBO, leveraged bomb out
    CDO, collateralized default obligation
    GAAP, generally avoided accounting principles
    P/E, inflated price/massaged earnings ratio
    FOMC, Federal obscured market committee
    EBITDA, every bankrupted investor totally deceived again
    GDP, gross domestic poverty
    CSRC, China securites rigging commission

    Just use your imagination, but go easy on the antacids.

    • Chicken
      May 4, 2016 at 9:19 am

      Pretty accurate summary of acronyms, those belong in the Urban Dictionary.

    • Petunia
      May 4, 2016 at 9:33 am

      Brilliant! And Funny.

    • Tim
      May 4, 2016 at 11:35 am

      GDP gross deception product

    • Ivy
      May 4, 2016 at 11:42 am

      Thank you for making me laugh. Your list should be part of the MBA curriculum.

      • walter map
        May 4, 2016 at 1:32 pm

        “Your list should be part of the MBA curriculum.”

        MBA, manic bunco artist.

        At least some U.S. MBA programs no longer investigate student cheating because it’s considered a valuable business skill. No, I’m not kidding.

  15. Ptb
    May 4, 2016 at 9:56 am

    I guess it’s far easier to strip value than to add it. Especially when there’s legal ways to do it and make it look like you’re adding it.
    Buyers beware

  16. josh
    May 4, 2016 at 11:17 am

    very nice macro summary. as a fairway customer, let me give you the micro. fairway was a family run multi-generational business. they were always successful by understanding the market and being very hands-on. i have whole foods and trader joe’s available to me but fairway is better than both and certainly cheaper than whole foods. they have the higher quality national brands and they were responsible for introducing a lot of new small brands to the marketplace. for example, in additon to selling about 20 brands of olive oil they produce their own brand that puts whole foods olive oil to shame.

    what killed this company is a bunch of mba’s. it’s as simple as that. if you want to keep a family business alive, don’t go public and listen to granpa more than the consultants. just ask zabars and citarella. they’re doing fine.

    • May 4, 2016 at 11:20 am

      I should have disclosed that we were happy and impressed customers of Fairway while we were living in Manhattan (until 2002).

  17. polecat
    May 4, 2016 at 1:38 pm

    P/E are the snake eating it’s own tail going forward……may they choke…before we all do !!

  18. Rick Weldon
    May 4, 2016 at 7:13 pm

    This is precisely the destructive type of financial flim flamery that Mitt Romney specialized in.
    Yea, the same guy who sanctimoniosly warned us that Donald Trump was a fraud.
    When a man attacks another man it’s always important to consider the source.

  19. ML
    May 4, 2016 at 11:54 pm

    Where many of these comments miss the point is through assessing the reality from the customer’s side of the counter. Business is not an extension of social services. The business wants to make money and the owners, themselves not getting any younger, given the choice between working long hours for a few pennies profit if lucky after the overheads have been taken care of and a few million cash from a PE, you’d have to be daft to plod on.

    When offered an IPO, investors that seriously think that the company is likely to perform as an investment once the novelty has worn off only have themselves to blame. Anyhow, I dom’t think invesors start off thinking they want to be in it for the long term. As rhe stock price goes up, they end up stuck with a dud because they’ve gotten greedy and don’t get out in time. It is important for the PE to leave something for the next man otherwise the IPO woukd be a flop from day one.

  20. Monoborracho
    May 5, 2016 at 9:23 am

    I’m not so sure that a significant part of the brick and mortar grocery business won’t be eventually touched. My wife and are both early 60’s, live in a small rural town and have no with no children at home. We have one grocery store and a WalMart for our groceries unless we drive 60 miles.

    Blue Apron is our choice for 3 to 4 dinners every week.

    If Blue Apron can attract us it is not our of reason to expect the Invisible Hand to continue to push home delivery. WalMart delivers a number of our home products to us now (cleaners, paper towels, TP, etc).

  21. May 23, 2016 at 10:18 pm

    I would love to have a delivery service that would provide me with all the healthy food my family eats. There was a trial by a national chain that they would deliver your groceries. I thought Aweaome! Save a little time… It was not worth it. It appeared to be a teenager who didn’t care what the produce looked like, if it was mush, even to check something as easy as an apple that had been dropped 15 times before they picked it special for me. After that I decided it’s better to shop at the local markets and local fruit and veggie delivery service. Even the co-ops are good but, for a busy single, more than full time work, with other duties it didn’t work either. So, I am back to the local farms and markets when I can hurry and grab stuff between seeing clients. Works for me but I wish people cared as much about what they deliver to you as they would expect for their own families. I would order much more such as fish, etc if someone would provide exceptional service. It is really such a great idea. You just can’t trust what you get.

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